Finance Minister Enoch Godongwana has come under fire from energy experts, trade unions and opposition political parties for his decision to exempt Eskom from reporting its irregular expenditure.
In an attempt to restore Eskom’s balance sheet through debt relief and enable the utility to borrow again to invest in new transmission infrastructure, Godongwana exempted Eskom from reporting irregular expenditure in its annual financial reports — but it will report it in Eskom’s integrated report.
The EFF, in its statement, cited the eNCA interview with former chief executive Andre de Ruyter, in which he“A decision to exempt an institution that is mired in corruption is therefore irrational andthat defines Eskom,” the EFF said, adding that the decision undermines “the pillars of transparency and accountability that our democracy is built upon”.questioned whether the decision was the way to deal with “an electricity disaster in South Africa”.
The Organisation Undoing Tax Abuse said the exemption decision was concerning, given the corruption involving Eskom. “But what does the finance minister do? Exempt them from declaring fruitless and irregular expenditure underOuta added that Eskom should be fully transparent when it comes to spending and procurement.
“Fruitless and wasteful expenditure included an amount of R840 million that was incurred on the construction of residential flats to accommodate artisans working at Kusile project as the building could not be used for the intended purpose,” Eskom reported in 2020.In the special government gazette issued by the finance minister on Friday, Godongwana provided Eskom with an exemption from section 55 of the Public Finance Management Act for 2022-23 and the following two years.
“In granting the exemption, Godongwana will also set conditions, which will be laid out in a letter to Makwana. The conditions will include: all irregular, fruitless, and wasteful expenditure must still be detailed in the Eskom annual report; irregular expenditure that occurs through criminal activity or losses must still be disclosed in the financial statements and the annual report,” treasury said.
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