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Power Station and Eskom exemption withdrawn

Minister of Finance temporarily withdraws Eskom’s exemption

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By Daanyaal Matthews

Political parties, civil organizations, and analysts were up in arms at the news that Minister of Finance, Enoch Godongwana, had issued an exemption to Eskom, through a government gazette, that would see the energy giant exempt from reporting financial irregularities in its annual financial report. This exemption however has been – temporarily – withdrawn by the Finance Minister after holding discussions with the Auditor General (AG), with Minister Godongwana commenting the following, when responding to Members of Parliament today:

“We’ve decided to withdraw the Gazette for now and take all these comments into account and also have a detailed consultation with the Auditor General and the auditors of Eskom so that the framing must be proper and the checks and balances for corruption are tightened. That’s really the intention but we welcome the comments from the honourable members.”

The temporary withdrawal has been largely welcomed by those in civil society with political analyst, Sandile Swana, commenting on Newsbeat, that the withdrawal of the exemption is indicative of the Finance Minister treating the finances of Eskom and South Africa carelessly, furthering by stating:

“From a public point of view, the voters, the taxpayers, and the customers of Eskom, the funders of Eskom, clearly the exemption is not necessary. What is necessary is to fire the people who are working at Eskom, who are not doing their job, because the basis of their exemption is that in Eskom there are inadequate systems of control to timelessly detect and record irregular and fruitless expenditure. So, there’s also poor record keeping, so the accounting administration at Eskom is the root cause of this problem, and the solution is to remove those people that don’t know how to run and administer the finances of Eskom and put competent people within six months,” he said.

Executive Director of SA Energy Forum, Zakhele Madela, has welcomed the temporary withdrawal of the exemption, arguing that civil society was right to be concerned about the exemption granted to Eskom given the SOE’s history with corruption, but has also argued that the Minister of Finance, and other economic cluster ministers, should be focused on rescuing and improving Eskom’s financial situation, stating:

“Eskom has been sagged with a lot of corruption from inside, and outside, and that in itself has not been thoroughly resolved. Now when they get given an opportunity to indulge in irregular expenditure, the public and all the stakeholders are within their right to be worried. But this still doesn’t take away the fact that we as a country through our Minister of Finance, and other economic cluster ministers, need to get to the bottom of how we get Eskom out of the financial hole,”

COSATU’s Parliamentary Coordinator Matthew Parks, has applauded the temporary withdrawal and urges for further discussion to be held on reporting of SOE expenditure but also calls for Transnet, who have in a similar fashion been exempted from reporting financial irregularities, to have their exemption withdrawn, stating:

“Government also needs to withdraw the exemption regulations put into place last year, in a similar vein, for Transnet. We can’t afford to be soft on these cancers debilitating the state, especially when we have recently been grey listed as a country and the international community is looking with a dim view at some of our shenanigans.”


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