Special Appropriation Bill and Chief Restructuring Officer For Debt Riddled Eskom

  • A Special Appropriation Bill will be formed aimed at allocating financial support to South Africa’s power utility.
  • Eskom will also see the appointment of a Chief Restructuring Officer who will be expected to reposition Eskom financially with careful attention to the mix between revenue, debt and cost structure of the company.

South African President, Cyril Ramaphosa, has pledged the support of his administration towards Eskom, stressing that the utility is vital to the economy and cannot be allowed to fail.

While delivering the first State of the Nation Address (SONA) of the sixth administration, Ramaphosa said a Special Appropriation Bill will be formed aimed at allocating financial support to power utility.

“We will therefore table a Special Appropriation Bill on an urgent basis to allocate a significant portion of the R230 billion fiscal support that Eskom will require over the next 10 years in the early years,” he told a joint sitting of the National Assembly (NA) and the National Council of Provinces (NCOP) in Parliament.

Essentially Essentially the Eskom Special Appropriations Bill provides for government through the Department of Public Enterprises to purchase R23 billion worth of equity in Eskom, subject to payment of the proceeds from the sale of certain non-strategic assets into the National Revenue Fund.

Further details on the financial assistance will be provided by the Minister of Finance in due course.

“Eskom is facing serious financial, operational and structural problems. Since the load shedding earlier this year, Eskom has made much progress in implementing its nine-point plan, ensuring better maintenance of its generation fleet, reducing costs and ensuring adequate reserves of coal,” said the President.

Ramaphosa further revealed that government will soon announce the appointment of a Chief Restructuring Officer who will be expected to reposition Eskom financially with careful attention to the mix between revenue, debt and cost structure of the company.

The President spoke out against the boycotting of payment to the utility.

“As a country, we must assert the principle that those who use electricity must pay for it. Failure to pay endangers our entire electricity supply, our economy and our efforts to create jobs.”

He added: “The days of boycotting payment are over. This is now the time to build, it is the time for all of us to make our own contribution.”

Author: Babalwa Bungane

This article was originally published on ESI Africa and is republished with permission with minor editorial changes.

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