ESKOM EXEMPTION WITHDRAWN FOR NOW

South African Finance Minister Enoch Godongwana stated that he has decided to withdraw the exemption of Eskom from the Public Finance Management Act “for now” to have further consultation with the auditor-general and Eskom’s auditors, telling the MPs.

“Yesterday we had intensive discussions with the auditor-general (AG) and in that discussion there were some contributions from the AG that need to be part of the framing of the gazette,” Godongwana said.

“In the light of those comments and comments from the public, we have decided to withdraw the gazette for now and have more detailed discussions with the AG and Eskom’s auditors so that the framing is proper and the checks and balances are tightened.”

These has been widespread criticism of the exemption, which aimed to assist Eskom achieve an unqualified audit and boost its credit ratings. Treasury was also concerned that a qualified audit opinion will trigger Eskom’s loan covenants and increase Eskom’s cost of borrowing. A similar exemption was provided to Transnet last year.

DA spokesperson on finance Dion George said on Tuesday that the party had briefed its legal team to look into the legalities of the exemption, while ANC alliance partner Cosatu called it “a green light to criminals that they can go feast and loot with impunity”.