Hon Deputy Speaker, hon Deputy President and hon members, hon Sarupen speaks of the DA's rejected inputs. Those inputs were rejected because the DA wanted to expropriate the committee's discussions without compensation, or at least, give credit to the committee!
[Laughter.] The DA summarised the committee's discussions and wanted to pass them off as their own!
In my submission, I will underscore some of these conditions as discussed and agreed to in the committee
My advice to hon Shivambu regarding his concerns about stabilising Eskom's coal costs are as follows: He must please revisit Eskom's 9-point Plan as presented to our committee, as well as the inputs made by hon Minister Gordhan during his Budget Vote debate on 11 July 2019. Please pay undivided attention to paragraph 32 under the Operational Performance section. A great injustice will occur if we approach this debate as if it is the first time we engage on the serious matter of saving Eskom and by extension saving the economy of this country.
It is very difficult to respond to hon Wessels because his input is from a defeated position. The least I can say is that President Nelson Mandela, in 1999, warned us of such politicians during his last state of the nation debate, when he said:
We should all be careful not to turn concern for difficulties into a death wish.
For us not to support this Bill because of the difficulties faced by Eskom is tantamount to an economic death wish.
Eskom is too important to the socioeconomic development of our country. The existence of a positive correlation between electricity availability and economic performance is well documented. The same can be said about a healthy Eskom and the country's economic performance. In fact, Eskom is the backbone of our economy.
The committee agrees with the President's assertion in his 2019 state of the nation address that Eskom is too vital and cannot be allowed to fail. Thus we are in support of this 2019 Special Appropriations Bill.
The committee further commends the good progress made by Minister Gordhan and the board as led by Mr Mabuza in their efforts to stabilise Eskom. In fact, various external interested parties who made written and oral
submissions during the public participation period echo the committee's sentiments.
However, the committee and most external parties agree that there should be stringent conditions attached to this recapitalisation package. Another area of overwhelming agreement is that these conditions must be accompanied by clear consequences should they be ignored.
We also agreed that some of the conditions will find themselves in the Appropriations Bill, others in regulations and others as ministerial conditions.
For the R26 billion to be appropriated in the current financial year, the Minister must put strong ministerial conditions. For the R33 billion for the 2020-21 financial year, some conditions must find themselves in the Appropriations Bill, regulations and ministerial conditions.
This will send a strong message that Parliament and the people of South Africa are serious about their demand for accountability and value for money.
Medupi and Kusile are critical for the country's energy security. However, the budget and time overruns in the build programme suggests high levels of internal control failures, negligence and even corruption, especially corporate capture. By the end of the construction of this project, the budget would have been overshot by over R140 billion.
As these budget overruns persists, the committee was further informed that one contractor has conceded that it was overpaid by R4 billion. I repeat: R4 billion! This is not small change by any measure!
In light of these alarming revelations, the following serious questions must be answered: Who was responsible for this payment? What was the role of the contractor in the said saga? How many other contractors have been overpaid? Does Eskom have adequate checks and balances in place in respect of its finances and governance?
These red lights suggest that a thorough forensic audit of the whole build project must be conducted as a matter of urgency. We therefore call upon the Minister of
Finance to institute a forensic audit and report back to Parliament.
The committee was shocked to discover that Eskom is not serious about its role in the transformation of the economy, especially through implementing the broad-based black economic empowerment policy, BBBEE.
The significant reduction in BBBEE spend - from 74% of target in the financial year that ended in March 2018 to a disheartening 54% against a self-imposed target of 85% for the financial year that ended in March 2019 - is a bad reflection on Eskom's commitment to transforming the economy.
The President again in the 2019 state of the nation address lists economic transformation and job creation as one of the seven key priorities.
The Minister of Finance argues in National Treasury's Economic Transformation, Inclusive Growth, and Competitiveness: Towards an Economic Strategy for South Africa paper, that public procurement can be leveraged
for the support and growth of small, medium and micro enterprises, SMMEs.
One of the ruling party's manifesto commitments is based on the de- concentration and transformation of the economy and opening it up to participation by small and medium enterprises, emerging co-operatives and township and village enterprises.
These are four good reasons for Eskom to pull up their socks in the area of