FINANCE Minister Godongwana said on Wednesday that he had withdrawn for now the controversial exemption granted to Eskom after a meeting with the auditor-general and the public outcry that had ensued.
Godongwana made the announcement when he was briefing a joint meeting of the parliamentary committees on finance, appropriations, public enterprises and the office of the auditor-general.
On March 31, Godongwana allowed Eskom to exclude a report on irregular and fruitless and wasteful expenditure from its financial statements. The power utility had to include this in its annual report, however.
This sparked an outcry from the public, political organisations, unions and civil society with some contending that those behind corruption were being protected.
The minister told the MPs that the National Treasury had granted a R254 billion bailout to Eskom in the 2023/24 budget for the next three years.
“Our intention was to mitigate whatever risk that may arise which might complicate the problem,” he said.
Godongwana also said Eskom had applied for the exemption and the National Treasury had considered the implications to the fiscus if the entity could not raise the capital.
“We looked at it from the fiscal sustainability eye and we then said we should grant Eskom the exemption from reporting these material losses due to criminal conduct, irregular, fruitless and wasteful expenditure, from disclosing those in the annual financial statements, but those should be disclosed in the broader annual report.”
He said the exemption was granted on condition that Eskom report quarterly on what action it was taking in that regard.
“The intention really is to allow Eskom to have better financial statements but at the same time create an environment where there is transparency on corruption and irregular expenditure.
“The intention is not to hide anything in that regard.”
Godongwana said he had an intensive discussion with the auditor-general and there were some comments by the auditor-general which had to be part of the framing of the gazette.
“In the light of those comments and general comments by the public, we have decided to withdraw the gazette for now and take all these comments into account, and also have a detailed consultation with the AG and the auditors Deloitte and Touche, the auditors of Eskom, so that framing must be proper, checks and balances to corruption are tightened,” he said.
Although the MPs were critical of the now withdrawn exemption, they welcomed the announcement.
“We welcome that sanity has prevailed and the minister has considered withdrawing the exemption,” ANC MP Bheki Hadebe said.
“It was our considered view that request and decision were irrational and unjustifiable given the state of Eskom,” Hadebe said before painting the picture of Eskom’s finances over the past five years.
DA MP Ghaleb Cachalia said: “I am pleased the minister decided to withdraw the gazette for now pending review.”
IFP chief whip Narend Singh said: “Sanity has prevailed. We welcome the fact that the gazette has been withdrawn.”
The meeting is continuing with MPs across the political divide lining up questions to be answered by Godongwana and his team from the National Treasury.
Cape Times
