Gauteng - Deputy Finance Minister Dr David Masondo says the government has been in discussions with various stakeholders on how to best address Eskom's debt of almost R400 billion.
Masondo was speaking during a webinar on Tuesday organised by the Inclusive Society Institute which held a dialogue under the theme: Social Democracy - Conditions needed in a society to enable it to advance towards a welfare state.
He said one cannot ignore the operational inefficiencies that are there (Eskom).
Masondo maintained that even if one deals with the inefficiencies at the power utility, it may be difficult to deal with public debt of almost R400 billion and they need to find a solution around it.
“We take the energy crisis very seriously, it is for that reason that the government also changed the law. In the past as individual companies, to generate electricity they were only limited to 1 megawatt and we said that is not going to work due to state failure. Eskom is not a good supplier to empower our economy, we said let us allow private individuals/companies to generate electricity capacity of 100 megawatts,” said Masondo.
Masondo further added that there is a great opportunity for the private sector to generate enormous energy, as a result of the structural form that the government has undertaken.
“Communities as well, we need to embark on a programme as social democrats to support communities to generate power, solar panels and other sources of energy.
“I think for me the big issue is Eskom debt and we think we agree that debt is the function of operational inefficiencies of a company. If your co-structure is high and your revenue is low you are going to generate a lot of problems for the company. In this instance, Eskom's core structure is very high but revenue is very low and you cannot solve this problem by increasing tariffs because you are going to choke the economy," he said.
He added: “But on one hand you cannot ignore the operational inefficiencies that are there (Eskom). In my view, even if you deal with the inefficiencies at Eskom, it may be difficult to deal with public debt of almost R400 billion and we need to find a solution to it. It came about from poor planning from our side which led to cost overruns in the big power stations which are not green by the way, which are Medupi Power Station and Kusile Power Station,” Masondo said.
He said as the government they are having conversations to see how they can address this debt.
“Unfortunately because of Eskom, the energy issue we've been preoccupied with Eskom in different ways but we are opening up for the private sector to participate in generating energy we think that it will make a huge contribution towards our energy problems notwithstanding the fact that we still need to sort out Eskom and its debt,” Masondo said.
International secretary of the Swedish Social Democratic Party Johan Hassel said society needs to be firm on taxes and hard on corruption.
“Because if corruption holds us inside of societies, institutions or tax frauds then people will distrust and that is the strongest attraction to our ideas of social democracy and solidarity,” said Hassal.
He said they as social democrats believe in the state and if people do not trust the state, they will not pay taxes and there would be parallel and distress and that means people would turn to alternatives.
“This is what we have seen and a lesson that we learned, that is why my general point on this target is that the institutions that are relevant for Sweden are equally relevant for South Africa and we sometimes neglect what we actually have created and we constantly need to improve these systems in order to make them adjustable for the changes for globalisation and economic structures but also social risks in that sense,” he said.
Hassel highlighted that the challenge remains the same and solutions need an agricultural, historical and societal approach which he believes we are fighting for the same things as progressive,” he said.
The institution said the objectives of the dialogue was to get an understanding of the participant countries’ economic, employment and fiscal structure and to consider what socio-economic and socio-political conditions are needed in a country to underpin the funding and sustainability of a welfare state.
Political Bureau