Parliamentary committees to meet Godongwana over Eskom exemption

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The standing committees on the Auditor-General, Finance, Public Accounts, Appropriations and the Public Enterprises Portfolio Committee will on Wednesday meet with National Treasury and Finance Minister Enoch Godongwana.

This follows the exemption of Eskom from declaring irregular, fruitless and wasteful expenditure in its financial statements.

The Chairperson of Parliament’s Standing Committee on Finance, Sifiso Buthelezi, says if Eskom is exempted from reporting on its financial statements, people may start doubting the credibility of public entities.

“I think it’s very important that we should be transparent. If there are things that are going wrong, we should be seen as a country that we are attending to those things [that] are not being covered or companies are exempted from reporting on their financial statements. It may create problems for us. It may even create problems with the ratings agencies. It may even create problems with the funders of our institutions. I think one important thing that may come up … people may start doubting our annual financial statements, not just of Eskom, but of other institutions,” adds Buthelezi.

The video below is the full interview with National Treasury Ismail Momoniat:

Meanwhile, independent energy analyst Hilton Trollip says Treasury has given Eskom a blank cheque for corruption through its partial exemption of the PFMA.

Trollip says this decision could have severe economic and political consequences.

“Eskom has R400 billion worth of debt. A lot of that debt is bonds. Bondholders and the people that hold that debt, they often have conditions that if the organisation that they’re lending to such as Eskom has a qualified audit then they have to recall their bonds. This could cause a run on Eskom bonds, government bonds, a huge impact on the currency.”

“The previous CEO of Eskom says that corruption is running rife at Eskom. It seems that there is another reason and this reason is that this government cannot get this corruption, this irregular expenditure under control and it’s now giving a blank cheque for corruption.”

The Black Business Council has blasted Godongwana for granting power utility an exemption from regulations that require state-owned entities to disclose expenditure that does not comply with the provisions of the PFMA.

The audio below is reporting more on the story: