Durban - The government was left red-faced yesterday when it announced it had revoked the state of disaster on the energy crisis and withdrew the exemption given to Eskom.
In a day of drama, Minister of Co-operative Governance and Traditional Affairs Thembi Nkadimeng and Finance Minister Enoch Godongwana announced the two decisions in separate meetings.
Nkadimeng, who was with Deputy Minister Parks Tau and Minister of Electricity Dr Kgosientso Ramakgopa, told a media briefing that the decision came as “a number of measures” were been taken to deal with the country’s severe energy constraints.
She added that since the state of disaster was declared government had adopted wide-ranging regulations which set out the responsibilities of the different organs of state to mitigate the impact of severe load shedding and avert a national emergency.
“As we move forward, government will, through the Energy Crisis Committee continue to engage, cooperate and coordinate its actions to reduce and eradicate load shedding using existing legislation and contingency arrangements.”
On the exemption, Godongwana told a joint meeting of five parliamentary committees that Treasury had decided to withdraw the Government Gazette announcing the exemption granted to the power supplier.
The decision to review the exemption was taken after a meeting on Tuesday with Auditor-General Tsakani Maluleke.
“There were comments by the AG, and in the light of those comments and comments by the public, we have decided to withdraw the gazette for now and take these comments into account.”
The public outcry came after Godongwana issued a letter to the Eskom board chairperson on March 31, granting exemptions from a section of the Public Finance Management Act and Treasury regulations.
This essentially meant the power utility’s annual financial statements would not disclose material losses because of criminal conduct, or irregular and fruitless and wasteful expenditures that occurred during the financial year.
Treasury said this expenditure would, however, still be declared in the entity’s annual report.
DA MP Ghaleb Cachalia said there has been significant disquiet about the exemption.
“Surely legacy issues can be separated in the annual financial statement notes and current issues of considerable importance and impact be addressed transparently, instead of a ham-fisted attempt of what appears to many to be hiding these in the vain hope that prospective investors will not pick it up,” Cachalia said.
IFP MP Mzamo Buthelezi said they were taken aback that the decision on the exemption had been made without Godongwana consulting with the AG.
“Of deep concern is that the minister spoke of ‘detailed consultations’ that would now need to take place with the auditor-general, as well as Eskom’s auditors, Deloitte. This would be to ensure that the necessary ‘checks-and-balances for corruption are tightened’.”
EFF MP Ntombovuyo Mente said the strategy by the Treasury was criminal in nature. “Concealment is a criminal offence. There are strict regulations and many laws regarding the public purse, and none of those laws have room to be breached.”
Civil society organisation Corruption Watch’s executive director, Karam Singh, said following all the disclosures from the Zondo commission, where it was revealed that Eskom had lost a billion rand a month, the expectation was that standards would be raised.
“It was hoped that we would be seeking greater transparency and greater accountability for corruption, not a kind of a technical approach to hoodwink rating agencies to say that we have an unqualified audit when we are not reporting on fruitless and wasteful expenditure.
“It is not a good look for Eskom and it is not a step in the right direction.”
Sakeliga CEO Piet le Roux said while they welcomed Godongwana’s announcement, they have already started investigating the extent to which similar exemptions are being contemplated for other state entities.
The South African Local Government Association (Salga) said the ability of a minister to regulate exemptions without parliamentary oversight appeared to circumvent principles of checks and balances.
“Salga is concerned about using constitutional powers entrusted to the National Treasury to promote non-compliance and lack of transparency seemingly and quite brazenly. It is proposed that, for financial disclosure exemptions, the concurrence from Parliament be mandatory,” it said in a statement.