Eskom an albatross around the neck of the fiscus, says Manuel
The former finance minister tells the Zondo inquiry that Eskom was once one of the top utilities in the world, with surplus generating capacity
Former finance minister Trevor Manuel said on Thursday that the reason the country’s state-owned enterprises have collapsed in the past decade is because of the cavalier way the Public Finance Management Act (PFMA) is followed.
Manuel is testifying at the state-capture commission, chaired by deputy chief justice Raymond Zondo.
His testimony has centered around the appointment of ministers, specifically about former minister Fikile Mbalula’s suspicions that Atul Gupta had “unlawfully interfered” in his appointment as sports and recreation minister.
Manuel was, however, also asked to give his views on the concept of state capture, and used Eskom as an example. He said Eskom had previously been an exceedingly strong institution, one of the top utilities in the world, which even had a stronger credit rating than the sovereign. It also had surplus generating capacity.
“Then changes happened. If you look at the situation in last decade all that has come apart,” he said. “Eskom didn’t impose a burden on the fiscus, not for cash injections nor for guarantees. All of that is gone … It is clear [now] that Eskom sits as an albatross around the neck of the fiscus.”.
He said Eskom had to be supported and that no South African wanted to see it go down. However, as the state took on more and more debt, the country’s credit rating suffered.
“It means we increase the burden of debt in the general economy,” Manuel said.
Manuel was the country’s longest serving finance ministers and has served in the National Executive under four presidents — Nelson Mandela, Thabo Mbeki, Kgalema Motlanthe and Jacob Zuma.
Manuel gave examples of how under each president he was informed that he was being appointed as a minister.