Finance Minister Enoch Godongwana says National Treasury has withdrawn Eskom’s partial exemption from the Public Finance Management Act (PFMA) granted to the power utility last week.
The exemption would have allowed Eskom to report irregular, fruitless, and wasteful expenditures in its annual report and not annual financial statements.
Godongwana announced the withdrawal during a joint meeting of Parliament's Committee on Appropriations, the Standing Committee on Finance, the Standing Committee on Public Accounts, the Standing Committee on the Auditor General, and the Portfolio Committee on Public Enterprises.
"The public has taken an interest in this matter precisely because of the history of corruption. We appreciate that South Africans are quite aggressive and vigilant against corruption, which is going to be an important point for our society. We take that as a positive step." said Godongwana.
On Tuesday, National Treasury explained that reporting these irregularities increased the likelihood of qualified audit opinion that triggers loan covenants, which will likely further increase Eskom’s cost of borrowing and may result in additional fiscal pressure from Eskom’s debt burden.
In the parliamentary meeting on Wednesday, Godongwana reiterated that position, emphasising that the intention of the exemption was not to hide anything but to allow the power utility to have a better financial statement and protect the fiscus, considering the government’s R254 billion debt arrangement with the power utility.
