Eskom fails to publicise China loan terms and conditions within 30-day PAIA period

The DA will not allow China’s model of “debt trap diplomacy” to take root in South Africa, and we will approach the courts if necessary to ensure that government is transparent with the public about the terms and conditions of loans received from China.

On the 10th of September, I submitted a Promotion of Access to Information Act (PAIA) request for the terms and conditions of the R33 billion loan from the China Development Bank (CDB) to Eskom to be made public. In terms of the Act, Eskom had 30 days to answer to my request for this information. This deadline has passed, and the terms and conditions of the loan remain suspiciously secret.

I have therefore submitted a Notice of Internal Appeal to Eskom in terms of section Section 75 of PAIA for not granting my request for access to the terms and conditions of the loan. If Eskom fails to honour the further 10-day deadline set by this Notice of Appeal, the DA will not hesitate to take the necessary legal action and approach the courts for relief.

In addition, I have formally approached President Cyril Ramaphosa, Eskom Chairperson, Jabu Mabuza, and CDB Liaison in South Africa, Jiangtao Cao, none of whom have been willing to play open cards and disclose the terms and conditions of this R33 billion loan. South Africans need to be assured that this loan does not tie our country and taxpayers to unaffordable and unfair terms and conditions. We will not allow China’s model of “debt trap diplomacy” to take root in South Africa.

President Ramaphosa has committed his administration to greater transparency and accountability. However, when pressed with a real example like this loan, he has chosen to follow the path of secrecy that was entrenched under President Zuma. This is an opportunity for President Ramaphosa to play open cards with the public about what this loan commits us to, and we expect him to do so.

Finance Minister, Tito Mboweni’s, maiden Medium-Term Budget Policy Statement (MTBPS) this week confirmed that ‘Eskom’s weak financial position remains a risk that could lead to a call on guarantees.’ After Eskom made a R2.3 billion loss with R41.5 billion gross finance costs and over R20 billion in irregular expenditure in the last financial year, there is reasonable doubt as to Eskom’s ability to pay back this R33 billion loan to the CDB.

If Eskom and the failing ANC government refuse to open the books on this loan, the DA will not hesitate to take the appropriate legal action.

“Technical team” on high fuel prices misses deadline by almost 100 days and counting

On 5 July this year President Ramaphosa set up another “technical team” tasked with finding solutions to the persistent petrol price hikes that have hurt the pockets of South Africans since the beginning of the year. Over the past ten months, the price of petrol has increased seven times.

While this “technical team” was given two weeks to present solutions to mitigate these fuel increases, the Minister of Energy, Jeff Radebe, has confirmed to the DA that no significant progress has been made – with an “initial report” still more than a month away.

The Minister said that “The initial report was expected at the end of September 2018, however, more work is still required before the report is finalised. It is anticipated that the work would be completed by the end of November 2018.”

This “technical team” has missed its deadline by almost 100 days and counting. While this failing ANC government dithers, South Africans are financially suffocating. To make matters worse, there was no relief announced in yesterday’s Medium Term Budget Policy Statement (MTBPS) for consumers – with fuel taxes set to increase each year over the medium term.

These fuel price increases are not only the result of international markets and global trends – as the ANC government claims – but are also in large part due to the weakening rand that is directly related to the mismanagement of the economy by the ANC government. Approximately one third – or R5.30 – of the cost of petrol per litre goes directly to government via the General Fuel Levy and the Road Accident Fund Levy.

The DA’s solution to this is straightforward: cut the fuel taxes by at least R1 in the short term with a view to review these levies on an ongoing basis; stop bailing out the bankrupt Road Accident Fund and ensure it runs efficiently; cut the bloated Cabinet; reject the proposed fuel levy increases in yesterday’s MTBPS; and tighten government’s belt to halt wasteful spending. In the long term, with prudent economic policy direction and sound fiscal discipline, a strengthening rand will aid the decrease in fuel costs.

The lax approach to providing any respite to ordinary South Africans appears to be the approach of this ANC government under Cyril Ramaphosa. Finance Minister, Tito Mboweni’s MTBPS yesterday delivered no hope for the poor and jobless. When it comes to the cost of living for ordinary South Africans, Mboweni decided to:

  • Commit more precious public money to bailing out bankrupt SOEs such as SAA and Eskom, instead of selling them off;
  • Cut funds to basic services – including health and education;
  • Reaffirm the continuation of E-tolls for Gauteng residents; and
  • Increase the fuel levy on already sky-high fuel prices;

With corruption and waste by ANC national departments and SOEs totalling over R100 billion, South Africa is being taxed to death to pay for the failing ANC governments repetitive sins. We cannot continue along this path any longer.

It is time for the change that creates One South Africa For All, where public money is spend on creating jobs and delivering basic services to all.

Manipulative Moyane turns a blind eye to Makwakwa investigations

Today’s Standing Committee on Finance meeting not only revealed that the South African Revenue Service (SARS) splurged R930 000 on the SARS Chief Officer of Business and Individual Taxes,  Jonas Makwakwa’s, bonus but it is now also clear that SARS Commissioner, Tom Moyane, failed to place any emphasis on the ongoing investigations.
When the Committee reconvenes on Thursday, the DA will again grill SARS to get clear answers about:

  • Why Makwakwa’s suspension has been lifted without being cleared from criminal investigations;
  • Why he received a lucrative and unauthorised handout before his suspension; and
  • Why Moyane is not taking the allegations and subsequent investigations into his right hand man, seriously.

The SARS investigation into Makwakwa did not focus on the allegations of criminal activity.
Makwakwa’s suspension has been lifted based on an investigation report conducted by Hogan Lovells which did not deal with any criminal allegations as raised by the Financial Intelligence Centre (FIC). In addition to the Hogan Lovells investigation there are still pending investigations, one of which is being conducted by the Hawks.
It is therefore mind boggling that Moyane has lifted Makwakwa’s suspension without these investigations being concluded.
Moyane’s continued obfuscation and refusal to provide full answers during the Committee meeting is deeply concerning as it indicates that he may not believe that he is accountable to Parliament.
The credit ratings agency’s recent announcements incontrovertibly confirmed that under Moyane, SARS has experienced severe institutional decay.
It was even implicit in National Treasury’s Medium Term Budget Policy Statement (MTBPS) document that the responsibility for the colossal R50.8 billion revenue shortfall is in part due to the poor performance of SARS and their effectiveness at collecting revenue under Moyane.
SARS is vital for the South African economy to function. However, further weakening of SARS will create an even greater trust deficit which the South African economy simply cannot afford.
The DA will continue fight to restore SARS to the quality institution that it used to be.

Treasury must urgently clarify how SAA funding requirements will be met

The DA welcomes Finance Minister, Malusi Gigaba’s, press briefing on the matter of the Public Investment Corporation (PIC) and funding for SAA.
However, National Treasury must urgently clarify how the airline’s funding requirements that are required in a mere four days are going to be met and whether section 16 of the Public Finance Management Act will be invoked again.
Rather than making matters ‘clear and clean’ as suggested by Treasury Director General, Dondo Mogojane, the press briefing has raised more questions than answers.
The Ministers and Director General of National Treasury confirmed that:
• Treasury has had extensive discussions with the PIC on possible funding for the SAA bailout;
• Some lenders to SAA will not extend some or all of their loans to SAA beyond Saturday; and
• There is no possibility of a Special Appropriations Bill in time to secure funding to meet the SAA lenders repayment deadline.
Despite what was confirmed, the uncertainty over how the SAA funding crisis is going to be dealt with remains.
This uncertainty cannot remain until the Medium Term Budget Policy Speech (MTBPS) process is completed and the people of South Africa cannot afford to be left in the dark as to the details of the full recapitalisation plan for SAA that Treasury says will amount to R10 billion in the current 2017/18 financial year.
This uncertainty will have a negative impact on the South African sovereign ratings and must be clarified long before the MTBPS.