Candles on tables at a Wimpy restaurant in Durbanville during electricity load shedding. Picture: Henk Kruger/African News Agency (ANA)
Candles on tables at a Wimpy restaurant in Durbanville during electricity load shedding. Picture: Henk Kruger/African News Agency (ANA)

What Eskom bailout would mean for Western Cape

By Mwangi Githahu Time of article published Oct 22, 2019

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Cape Town - The Western Cape legislature wants people to be aware of exactly what the latest Eskom bailout will be used for.

Chaired by the DA’s Deidré Baartman, the Standing Committee on Finance, Economic Opportunities, and Tourism held an urgent session on Friday afternoon to discuss the impact on the Western Cape’s economy of the Special Appropriation Bill for Eskom, that will give Eskom R59 billion. The bill, which is before Parliament, proposes the cutting of provincial budgets across the country to find the money to bail out Eskom.

Baartman painted a picture of what Eskom’s demands for more money could mean for the Western Cape. She said: “Eskom is asking Parliament for R59bn,which is separate from the money they asked the National Treasury for at the beginning of the year and excludes the fact that they still need to borrow billions more commercially.

“Previously, the Treasury sent all the provinces a guideline to indicate that they must now come up with scenarios of how to cut their budgets by 5%, 6% and 7% over the next three years. 

“That’s 5% for this coming year, 6% the next and 7% the year after that. In this province alone, that would amount to R13bn over three years.”

Let me give you an example of what that means for respective departments in the Western Cape. In education, if they were to implement that guideline they would have to cut their budget by R1.2bn. That is the whole education infrastructure budget. If they were to make a 5% cut it would mean they could build no more buildings. No schools, nothing. Alternatively the R1.2 billion would mean cutting more than 2 000 teachers.

The committee was told by David Maynier, the MEC for Finance, Economic Opportunities and Tourism that failure to urgently strengthen Eskom’s balance sheet while the government was working on long-term sustainable solutions may have a negative systemic impact on the province and the country as a whole.

Maynier said: “The national economy and the provincial economy are linked, and for that reason the biggest risk to the provincial economic outlook is the national government.

“The Special Appropriations Bill for Eskom will erode the credibility and sustainability of the national fiscal framework, and risks negatively affecting the provincial budget and service delivery in the Western Cape,” said Maynier.

Baartman wants the National Assembly to apply the brakes on adopting the bill. She said the National Council of Provinces had scheduled October 23 to consider the bill, less than 24 hours after the National Assembly adopts it on October 22.

Baartman would rather they used the week of October 22 to 28 to conduct a series of “meaningful” public hearings and public participation in the provinces, and said they would still be on time for the October 30 deadline to pass the bill.

@MwangiGithahu

[email protected]

Cape Argus

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