The National Treasury is facilitating another round of State Capture by recklessly exempting Eskom and Transnet from disclosing irregular, fruitless, and wasteful expenditure
4 April 2023
The Congress of South African Trade Unions (COSATU) is shocked and alarmed by the National Treasury’s reckless and shady decision to exempt Eskom and Transnet from disclosing irregular, fruitless, and wasteful expenditures. The Minister for Finance announced on 31 March that Eskom is exempted from disclosing any irregular, wasteful, or fruitless expenditure for the financial years of 2022/23, 2023/24, and 2024/25.
The Minister for Finance announced a similar exemption for Transnet on the 31st of March 2022 for the need to disclose any losses arising from criminal conduct, and irregular, fruitless, and wasteful expenditure for the financial years of 2021/22, 2022/23, and 2023/24.
This is an abominable decision devoid of any common sense, good governance, or legal rationale. The Federation rejects it with the utter contempt it deserves and demands its immediate cancellation.
We find it staggering and alarming that the people who are entrusted with managing the national resources are indulging these two poster boys (Eskom and Transnet) of mismanagement who are known for flouting processes and failing to comply with regulations and procedures.
It is scandalous that the same organisation with the ethical responsibility to see to it that public money is used for its designated purposes and spent within the guidelines of existing legislation across the state is trying to justify this scandalous behaviour.
It was French philosopher Frédéric Bastiat who said, “When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.”
Instead of dealing with this mismanagement of resources, the National Treasury has been busy implementing cuts in public spending, leading to a massive reduction in all aspects of social and economic benefits to the people, in wages, retirement benefits, and pensions.
Eskom is in a crisis today because National Treasury kept bailing out the power utility without ensuring that proper governance was implemented. Medupi and Kusile were built to ensure the economy would not experience load-shedding. About R100 billion was allocated to them but this has ballooned to over R200 billion and counting to date.
The nation has experienced unprecedented levels of load-shedding as a direct consequence of the systematic mismanagement and sabotage of Eskom. Workers are losing wages and being retrenched in their thousands when their workplaces are not able to operate and pay their bills.
Transnet is being decimated by criminal syndicates stripping it of its cable and steel, and more than 100 train carriages have been destroyed by arsonists, while gangs run amok on trains terrorizing passengers. Many commuters have died because of train accidents and urban economies are severely disrupted when up to 10 million commuters cannot arrive at work on time due to train delays.
Both Eskom and Transnet were flagged by the Zondo Commission as serial offenders who have no proper management and governance systems. Parliament has had to haul these two limping SOEs over the coals time and again for their total disregard for Public Finance Management Act.
Despite all these warning lights, National Treasury thought it sensible to now exempt these two poster boys of wasteful, irregular, and fruitless expenditure from proper accountability.
This is a green light to criminals that they can go feast and loot with impunity at Eskom and Transnet. The meaningless platitudes that National Treasury has presented to justify this nonsense are an insult to all taxpayers.
The regulations requiring Eskom and Transnet to submit reports on what they are doing to address their financial failures are not worth the paper they are written on.
It is even more bizarre that this decision was taken to try and outwit and impress the rating agencies and lull them into writing glowing reviews of Eskom and Transnet. The National Treasury either believes that rating agencies are most fantastically gullible or they themselves are delusional.
The price South Africa pays for irrational reverence for rating agencies is that it cannot fix the intractable problems facing the country and the economy.
COSATU reiterates its call for legal consequences for those who flout the rules and fail to comply with the country’s law. This country needs a massive drive to enforce the laws against irregular and unauthorised spending and corruption. Those responsible for this mess should be censured and held accountable.
This is the clearest sign that the sixth administration has given up on the fight against corruption and is not prepared to implement the Zondo Commission recommendations. This reckless decision is tantamount to them facilitating another round of State Capture. We call on President Ramaphosa to intervene and instruct National Treasury to cancel this bizarre decision immediately.
Issued by Sizwe Pamla, National Spokesperson, COSATU, 4 April 2023
