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U-turn on state of disaster and Eskom’s financial reporting exemption as public outrage wins

The government has done a double U-turn regarding its electricity crisis management policy in the wake of public outrage. Picture: Timothy Bernard African News Agency (ANA)

The government has done a double U-turn regarding its electricity crisis management policy in the wake of public outrage. Picture: Timothy Bernard African News Agency (ANA)

Published Apr 6, 2023


Cape Town - The government has done a double U-turn regarding its electricity crisis management policy in the wake of public outrage.

Not only has it withdrawn its exemption of Eskom’s disclosure of irregular, fruitless and wasteful expenditure, but it has also abandoned the national state of disaster on Eskom.

Cooperative Governance and Traditional Affairs Minister Thembi Nkadimeng on Wednesday cancelled the state of disaster, 55 days after President Cyril Ramaphosa made the announcement.

Nkadimeng said after the gazetting of the state of disaster in February, the government adopted “wide-ranging regulations” setting out the responsibilities of the different government organs to mitigate severe load shedding, prevent the escalation of electricity supply constraints, and prevent a national emergency.

The state of disaster’s regulations were meant to augment government’s energy action plan.

She said Electricity Minister Kgosientso Ramokgopa’s appointment had given the government’s efforts “oomph” in improving the power supply.

“The state of disaster was a necessary response to the impact of critical levels of load shedding on the economy and vulnerable sectors such as health and small businesses,” she said.

Nkadimeng said the decision was motivated by the fact steps taken to reach government objectives have “assist(ed) in getting systems and processes in place to ensure that government is ready to deal with load shedding challenges”.

DA MPs Ghaleb Cachalia and Kevin Mileham hailed the move as a “victory for South Africans and a reminder that the DA was right in opposing the blanket declaration”.

The about-turn follows a legal challenge by the Organisation Undoing Tax Abuse (Outa) in the Gauteng High Court.

Outa said they were informed of the decision through a letter from the State Attorney’s office on Wednesday morning informing them the government had not only abandoned the state of national disaster but would also not challenge the Outa legal case.

Outa’s executive director, Advocate Stefanie Fick, said: “This is a huge win for civil society. We are delighted. Civil society showed that we have a voice, and our voices matter. In principle, this case is done and dusted.”

Earlier, Finance Minister Enoch Godongwana said the notice gazetted last Friday which exempted Eskom from disclosing irregular, fruitless and wasteful expenditure would be withdrawn – for now.

This followed public outrage regarding Godongwana’s decision to exempt Eskom from the Public Finance Management Act (PFMA) and allow it to report on irregular and wasteful expenditure in its annual report – and not in its financial statements.

Political groups and civil society raised concerns that this would conceal endemic corruption at Eskom, which would not evade legal scrutiny.

Minister of Finance Enoch Godongwana. Picture: Phando Jikelo/African News Agency (ANA)

In a briefing to five parliamentary committees, Godongwana explained the exemption was granted to help Eskom improve its credit rating and achieve an unqualified audit.

After a meeting with the auditor-general (AG) on Tuesday, however, it became clear further consultation was needed with the AG and Eskom’s auditors, Deloitte, to institute checks and balances against corruption.

Godongwana said: “The intention 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.”

AG Tsakani Maluleke yesterday welcomed Godongwana’s withdrawal of the gazetted item and believed it allowed for sufficient consultation with the national Treasury, Deloitte and the AG to address any technical issues that may have arisen.

Director of the Political Futures Consultancy, Daniel Silke, said it was a foolish decision on the part of the minister to exempt Eskom from the necessary disclosures, as well as an embarrassment for the government and particularly a disappointment from the president’s current administration.

According to Silke, this week’s events showed a substantial trust deficit between citizens and government practitioners.

In terms of transparency and accountability, Silke added that what had been proposed by the minister was clearly a smack in the face of suspicious South Africans.

Professor Andre Duvenhage, political analyst at North West University, added: “The withdrawal of the exemption has to do with the public outrage, there was huge mobilisation and organisation in the public domain, as well as in the political domain – it was absolutely clear that they will be strongly actioned not only from within Parliament and legislative institutions, but also resistance from within the ANC.”

Eskom said that it would not be commenting on the PFMA exemption and SOD withdrawal at this stage, pending engagement with the government.

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