Inter-Ministerial Task Team on the defaulting municipalities that are owing ESKOM (postponed)

Public Accounts (SCOPA)

22 October 2019
Chairperson: Mr M Hlengwa (ANC)
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Meeting Summary

VIDEO: Scopa to hear on the debt owed to Eskom by municipalities

The Standing Committee on Public Accounts (SCOPA) was meant to be briefed by the Inter-Ministerial Task Team on the defaulting municipalities that owed money to ESKOM.  However, the Committee decided that the meeting would not continue because the task team, especially its chairperson, Minister Nkosazana Dlamini-Zuma, was not present, even though it had been communicated to the Committee that the Minister would be present.

The Committee felt undermined. The Chairperson was adamant that the trend of meetings being affected by the non-attendance of key personnel, had to be stopped. He ruled that apart from the meeting being postponed, all the delegates that had flown in from Pretoria would have to advise the secretariat the costs involved of being at the meeting, including flights and accommodation, so that the Committee could begin the process of attaching those costs to individuals. A Member also proposed that this information be forwarded to the Leader of Government Business, which was in the Deputy President’s office, as evidence to put forward into the programme of the meeting on Thursday, when Parliament was dealing with the absenteeism of Ministers in Parliament.

Meeting report

The Chairperson welcomed everyone to the meeting, and said there had been no apologies. There were no ministers, yet the Inter-Ministerial Task Team (IMTT) was expected to present today.


Mr M Dirks (ANC) wanted clarity as to who was actually present at the meeting, apart from Eskom and the task team. Dr Nkosazana Dlamini-Zuma, the Minister of Cooperative Governance and Traditional Affairs (COGTA) and the Department’s Director-General should be in attendance as part of the IMTT. The Eskom board was also expected to be present.

The Chairperson said there was an Eskom board member present, as part of the accounting authority. 

Mr Dan Mashitisho, Director-General: COGTA, apologised for the absence of the Minister, who chairs the IMTT. She was unable to attend because of a Cabinet sub-committee meeting, and had asked for this apology to be advanced. SCOPA had invited her in her capacity as the chairperson of the task team.   

The Chairperson stressed that an email was sent to the secretariat of the Committee on 20 September 2019. Based on the email, the Committee expected that the Minister would be present at this meeting.  This was not acceptable. Minister Zuma was not the only member of the task team. Other members could have been delegated to be present at the meeting. It was difficult to understand why there had been this U-turn. This to-ing and fro-ing had started way before this meeting started insofar as correspondence was concerned. It was unsurprising that this issue should arise. There was no explanation that would suffice, because the Committee should have been forewarned.

Mr A Lees (DA) said the Chairperson had expressed the concerns that were shared by most of the Committee Members. The fact was that the IMTT had been given adequate notice, as had the Minister who chaired this team. The fact was that this was a crisis. This task team had been operating since February 2017. During that period, the debt to Eskom of municipalities -- which was the primary function of this task team -- had almost tripled. It was completely unacceptable that the chairperson of that team or structure simply chose not to arrive. There were municipalities that were faced with the prospect of their electricity supplies being cut off because this task team had failed in its duties or mandate. Instead of reducing the municipal debt, this debt had more than tripled. It was outrageous, and the Committee should send that message to the Minister and tell whoever was representing her at this meeting that the Committee would be expecting her before it very soon. She needed to appear to explain why this task team had failed to make any progress in reducing municipal debt. Eskom was the biggest crisis facing South Africa today, yet it was being treated with such disdain. He proposed that this delegation be sent away, and the Committee should determine when it would appear with the Minister for the entire period at the Committee’s convenience.

Mr S Somyo (ANC) said that according to the Committee’s invitation, the IMTT should be part of the delegation, including the Eskom board. It needed to take into consideration the seriousness of the fact that the Committee had met this morning without a key component of the expected delegations. The South African Local Government Association (SALGA) was at least present in full force. The Committee should view this as a measure indicative of unacceptable conduct by the task team. It was unclear as to whether the Eskom delegation was in order. Before the Committee made any judgment call, it was important to establish exactly who was present at this meeting. This was a very important time in relation to the functionality of Eskom and the municipalities, and therefore this meeting was a very serious platform to find ways of mitigating the current problems in so far as the fiscal capabilities of such bodies were concerned.

Ms V Mente (EFF) reminded the gathering that Parliament was attending to the Special Appropriation Bill to Eskom simply because Eskom’s problems were far bigger than any other alternative could fix. Parliament had had to intervene and appropriate special funds to ensure that Eskom was working. What had caused the problems of a lack of financial management, and also the lack of funds in Eskom, was that municipalities were not doing what they were supposed to do. While it was important that COGTA, the DG of COGTA and SALGA were here, they had been there when this problem started. This was why the Inter-Ministerial Task Team had been established. It could not serve the Committee any purpose to speak to the people who could not fix the problem which had resulted in the intervention of the IMTT. The IMTT should tell the Committee how far it was with its intervention and not the same bodies who could not deal with the matter.

For the Chairperson of the IMTT, the Minister of Public Enterprises and the Minister of Finance not to be here was not acceptable. They were the ones who needed to explain what interventions were coming. Both COGTA and SALGA had to explain what they were doing and what they could not do, and were defeated in all of this.  They were unable to push the municipalities that were failing to pay. Such municipalities were still undertaking big tasks and projects, yet they were not looking into their debt. They simply neglected the fact that Eskom had to be paid. They take on new projects with whatever funding they receive. Having received their funding, they do not allocate it to the debt of Eskom. COGTA could not monitor that. The IMTT had to explain what monitoring tool was in place so that whenever municipalities were receiving their division of revenue, they started allocating certain funding as a compulsory allocation to the debt of Eskom. The two bodies that were here had not helped the Committee. It would serve no purpose to speak to them.

Ms N Tolashe (ANC) indicated that her problem was that the Committee was not doing what it was expected to do. The Committee was not meant to be discussing an apology. A full complement of the Committee had come just to discuss an apology. It had been communicated to the Committee that the Minister would be here. It had been misled by the office of the Minister, which had indicated that the Minister would be present. The Committee could have come to a different conclusion if it had been informed that the Minister would not be present. The Director-General should take note of the fact that the Committee had been misled. Someone should take the responsibility.

It was not important to know how many representatives of each stakeholder were here, because the IMTT was what had been set up as an intervention. The Committee therefore needed to hear from the Ministerial Task Team how it intended to assist in the current situation. The main stakeholder that was meant to be present was not. In the correspondence between the Committee and the Minister’s office, the Committee had been misled. As Parliament, the Committee could not accept that and fold its arms and smile. It had to take action so that in the future it did not happen again. Every person who travelled to be here had spent some taxpayer’s money which, in the end, they were responsible for, including COGTA, because the Minister of COGTA was the Chairperson at this stage.

The bottom line was that the municipalities could not pay Eskom. The result was that the people of South Africa were on the streets and the country was in turmoil. The task before Parliament this afternoon in terms of the Special Appropriations Bill was because Eskom had this huge problem. The Committee should take a resolution on why the person who was meant to lead the delegation was not present.

Ms T Marawu (ATM) said that the IMTT had been appointed as the mediator. While the Committee could have a discussion and make recommendations, who was going to take those recommendations to the President's Coordinating Council (PCC) and monitor the decisions that the Committee was going to take? The most important arm was not present. On that basis, there was no need to continue.

Mr Dirks agreed that the meeting should not continue, because it would set a precedent for undermining the Committee and Parliament. However, given that so many officials had come to attend this meeting and that the Committee also had a responsibility to take care of public money, it  should weigh up the money that had been spent and what the Committee was trying to achieve here. By yesterday afternoon, the Director-General could have communicated to the Committee to say that the Minister could not make it so that the Committee could have dealt with this matter. That was what made the Committee so angry.

Lastly, even Eskom had sent only one board member. It could have at least sent the chairperson of its board or the chief executive officer (CEO). Parliament wanted the key people in Eskom to appear before the Committee. A key problem was that Eskom was within the Department of Public Enterprises, instead of the Department of Energy. It was not clear why Eskom was in the Department of Public Enterprises. This non-attendance undermined the Committee.

The Chairperson reiterated that the briefing today was supposed to be by the IMTT. The IMTT consisted of the Minister of COGTA as the Chairperson, the Minister of Finance, the Minister of Energy, the Minister of Water and Sanitation, the Minister of Public Enterprises, the President of SALGA, and the Chairperson of the Eskom board. Apart from the President of SALGA, no one else from the IMTT was there to brief the Committee. Originally, Eskom was not going to make a presentation, but they had requested that after the IMTT had briefed the Committee, they would be able to give a response as the body affected most. There was an Eskom board member here, but she would have been responding on behalf of Eskom, and not the IMTT. This was the issue. If the IMTT had been here, then Eskom would have presented their side of the story in terms of how things had gone. Eskom could not, however, respond in a vacuum. The Committee had been undermined.

Ms Nelisiwe Magubane, Non-Executive Director: Eskom, said she had an intimate knowledge of Eskom’s problems.

The Chairperson asked Ms Magubane, for purposes of accountability, to mention the other apologies.

Ms Magubane responded that Mr Jabu Mabuza, the Eskom Chairperson, was out of the country at the moment, together with Mr Calib Cassim, the chief financial officer (CFO), so they were not available for this particular meeting. 

The Chairperson said he had received an apology from Mr Parks Tau, Deputy Minister of COGTA, who had urgent matters to attend to.

Mr Lebohang Tekane, Project Manager, Department of Public Enterprises (DPE), said that the Minister of Public Enterprises, Mr Pravin Gordhan, was part of the delegation that was in Russia with the President for the Russia-Africa summit.

The Chairperson said that the Committee was used to the tendency of being undermined, but it was not going to be sustainable any longer. If the Committee had to subpoena delegates, it would do so, regardless of the office that the delegate holds. The country had had load-shedding just last week. The project manager at Medupi had resigned. The State Security Agency (SSA) had come and told the Committee that of the 121 names submitted for vetting at Eskom, only 21 had complied, meaning that there were 100 people who were telling the Committee to jump off the nearest cliff. There was a special appropriation this afternoon, and somehow Eskom believed it had to get a blank cheque, particularly in so far as the Chairperson/CEO was concerned.

The IMTT was not here, and that completely undermined this Committee and Parliament. If the Committee sits here and dignifies being undermined and allows this meeting to proceed, it sets in motion a precedent that says it was acceptable for the Committee to be undermined. That kind of nonsense must end here and go no further. Addressing the Director General, he said it was not the first time that the Minister or the Department had not taken seriously any of the matters the Committee had. The Committee had had three days of meetings with municipalities, and the Minister was not present, although the Deputy Minister had been in and out of the meetings. The hand of political leadership was certainly not being felt by this Committee. If that was how the relationship was going to start off, it was going to be very difficult.

He said this meeting would not proceed because the IMTT was not present. If the Committee sat tere and just ticked the boxes, it would be aiding and abetting this prevailing incompetence. Eskom had a serious problem of municipalities unable to meet and service their debt. An intervention had been put in place, not by the Committee, but it had a duty to hold accountable those that had been given that responsibility and that mandate -- and those responsible did not want to account. The intervention had not worked. The Committee took a serious exception to this behaviour, and hoped the Director-General conveyed this sentiment. The Chairperson would do so in correspondence.

The Committee would consider very seriously the cost implications. All the persons who had flown in from Pretoria must forward to the secretariat the costs involved in the delegates being here, including flights and accommodation, by the close of business tomorrow so that the Committee could begin the process of attaching those costs to individuals. When the Committee did that, people would know that this Parliament that appropriates their funds was not going to accept a situation where people did not accept subjecting themselves to accountability. It would not happen. It ends today. This message needed to go out to everyone. The Minister’s office had indicated that she would be here, but she was not here.  While the Committee had a lot of work, it was quite flexible. With a forewarning, it would have been quite amicable to negotiations about another time, but it becomes hard-headed when it is treated with this kind of disdain. There was a lack of good faith.

Mr Lees reiterated that the delegation needed to provide the costs of today to the Committee for its consideration. That was the determination of the Committee.

The Chairperson ruled that this information must be provided by 4pm so that a determination could be made.

Mr Somyo asked, for recordkeeping purposes, how many official apologies had been received.

The Chairperson replied the there had been apologies from the Minister and Deputy Minister of COGTA, and the Minister of Public Enterprises. The Committee would consider whether or not to accept the chairperson of the Eskom board’s apology. The indication even last night was that the Minister had requested to leave early. The Committee would have been amicable to that. The current apology was taken with a pinch of salt.

Mr Somyo pointed out that the Committee had come to the meeting having made certain sacrifices of its own.

Ms Mente said that the Director-General’s apology was not acceptable. It must always be communicated before time, and not be relayed at a meeting. Furthermore, when the Committee received the costs involved for the delegation to be present today, could this information also be forwarded to the Leader of Government Business, which was in the Deputy President’s office, as evidence to put forward into the programme of the meeting on Thursday, when Parliament was dealing with the absenteeism of Ministers in Parliament.

The Chairperson added that this information needed to be forwarded by the close of business tomorrow.

The Director General emphasised that there had been no intention on the part of the Minister to mislead the House.

The Chairperson responded that the Minister would answer for herself.

The meeting was adjourned.


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