Wed. Nov 20th, 2019

DA fume as Eskom’s alleged debt-swap plan “could see R100bn leave South Africa”

eskom debt-swapIf anyone knows how to waste money, it’s Eskom. The DA suspect they’re trying to negotiate a “debt-swap”, in a move the party says could cripple Mzansi.

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Representatives for the DA are not pleased with reports that Eskom is looking to negotiate a “debt-swap” with the National Treasury. This comes just a day after the power utility confirmed they owed R36 billion to contractors trying to fix the much-maligned Kusile Power Plant.

The new build is woefully underperforming, and its lack of reliability was identified as one of the key reasons South Africa underwent severe load shedding in 2019.

Eskom: What is a debt-swap?

Alf Lees is the DA’s shadow Minister of Finance. He’s got wind of the alleged plot, which would apparently see Eskom take on debts owed by the government, in exchange for reduced demand from certain creditors. The move doesn’t seem like something the firm should be entertaining, but it’s got the opposition party spooked:

“The DA strongly opposes this idea, as it would likely send the country down the dark path of a downgrade to junk status. This proposed plan will not address the underlying problems at Eskom, it’s simply a temporary solution to the massive governance failures at the utility.”

“We call on Minister Tito Mboweni and National Treasury to come clean and give an urgent update on Government’s reported plans on a debt-swap. It’s not feasible for South Africa’s standing in the long-term, as it will result in about R100 billion of investment to flow out of the country.”

Alf Lees

Natasha Mazzone weighs in with her criticism

The threat of creating another multi-billion rand sinkhole has got observers on edge. Natasha Mazzone – the shadow public enterprises minister – also expressed her concerns over the current state of Eskom and called for a debate on the utility’s future when Parliament reconvenes this week.

She also branded it “outrageous” that some ministers who oversaw the recent electricity crisis are returning for the sixth National Assembly. Mazzone went on to plead with authorities to hold Eskom’s corrupt officials – past and present – to account.

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