MEDIA STATEMENT: COMMITTEE RECEIVES BRIEFING FROM DEPARTMENT ON RESTRUCTURING OF ESKOM AND ITS FIRST QUARTER PERFORMANCE
The Portfolio Committee on Public Enterprises received briefings from the Department of Public Enterprises on its first quarter performance report for the 2023/24 financial year, and on progress regarding Eskom restructuring yesterday.
Briefing the committee, the Acting Director-General of the department, Ms Jacky Molisane, informed the committee that the department has drafted the National State-owned Companies Bill, which is currently undergoing consultations. She said a draft business case for the proposed holding company has been prepared for consultation.
The committee heard that following broad consultation on the Eskom Debt Relief Bill, it was passed by National Assembly and sent to the National Council of Provinces (NCOP) for concurrence in May 2023, where it was passed on 21 June 2023. The Bill was sent to the President for assent and it was assented into law on 5 July 2023 (Act 7 of 2023). The committee also heard that the National Treasury is finalising the strategic conditions of compliance for Eskom to enable the conversion of the loan into equity.
Regarding the three Eskom companies that were separated and operationalised, Ms Molisane said that the National Transmission Company South Africa (NTCSA) was established, it was registered and incorporated as a wholly owned subsidiary of Eskom. Ms Molisane told the committee that application of approval for the revised transmission licence was submitted to the National Energy Regulator of South Africa (NERSA) in September 2022.
On 27 July 2023, the NERSA approved the licence of the NTCSA to operate the transmission system (excluding the Trading and the Import/Export applications) within the national boundaries of the Republic of South Africa. NERSA stated that trading and the import/export applications will require further consideration before being submitted to NERSA’s electricity subcommittee.
The committee was concerned about the department’s delayed processing of the SOC Bill. The committee also questioned the need for Eskom to be unbundled into three companies, including one for distribution, without considering municipalities for distribution. The committee stressed that the municipalities should have full control of the distribution of electricity in communities within their jurisdiction.
The committee indicated that Eskom supplies electricity to the entire country, converting debt to equity. It said Eskom is not generating revenue, which has a direct impact on Eskom’s liquidity, hence the government must intervene all the time.
On Transnet, the committee was of the view that Transnet has made progress in creating space for the private sector to participate, but questioned why the private sector would invest in an unprofitable business and what this says about job security for Transnet employees.
On the issue of the closure of the department, which was announced by President Cyril Ramaphosa when he delivered the 2023 State of the Nation Address, Ms Molisane said they are awaiting promulgation by the President. The department will start the process of closure after that.
The Deputy Minister of the department, Mr Obed Bapela, who led the department during presentations, said: “The DG and the team are engaging officials in that the department is coming to an end, the matter of officials. The process is under way to discuss a way forward, which also includes organised labour.”
Source: Parliament of South Africa