The Organisation Undoing Tax Abuse (Outa) has raised concerns that Eskom has been exempted from disclosing irregular and fruitless expenditure in its annual financial statements for 2022/23 and the next two years.
Minister of Finance, Enoch Godongwana, gazetted the notice of exemption for the power utility on 31 March.
Outa said the exemption for the state-owned entity (SOE) violated the prerequisite of Section 55(2)(b)(i) of the Public Finance Management Act (PFMA), which regulates the financial management of government departments and public entities. "Exempting Eskom from complying with certain sections of the PFMA sends a clear message that the government is not serious about transparency and accountability when it comes to Eskom's financial management practices," Outa CEO, Wayne Duvenage, said.
He said the exemption created opportunities for corruption and/or financial mismanagement that would harm the public interest.
"While a number of SOEs have been exempted in similar matters in the past, the current level of distrust does not bode well for this decision. And with good reason, if you look at recent statements by Kgosientso Ramokgopa, the Minister of Electricity, that corruption is not a key issue in the dismal performance of some of Eskom's power plants," Duvenage said.
"Given the well-documented history of looting at Eskom, this is clearly untrue. Who can blame the public if they don't trust the government's latest move to exempt Eskom from adhering to the PFMA?"
Duvenage said that if the decision had been made to cut back on red tape to fix the electricity crisis, there was possibly an argument for some exemptions.
However, he said the organisation was concerned that the decision would lead to "even more fruitless and wasteful expenditure" that the country could not afford.
He said Outa would be writing to Godongwana "to understand the purpose of these regulations and ensure they are aligned with the principles of transparency, accountability, and good governance in the public sector.
“Once we receive an answer from the minister, we will decide on our next steps. We cannot allow even more deviations from regulations," he said.
Duvenage added that Outa was still proceeding with legal challenges opposing Karpowerships and the electricity state of disaster.
"We believe the decision to declare the disaster was irrational, arbitrary, and unlawful. We already have all the laws necessary to enable urgent action to address the energy crisis, something generated over the last 15 years by the government's poor planning, brazen corruption, and a total lack of accountability.
“Our country also cannot afford the extremely expensive Karpowership deal," he said.
