Eskom’s government guarantee tops R200bn

Cape Town – National Treasury director general Lungisa Fuzile says government's biggest guarantee is to Eskom, which could have been higher if the power utility's build programme progressed faster.

The outgoing director general, who leaves his position at the middle of May, was answering questions in Parliament on Tuesday after presenting National Treasury’s annual performance and strategic plans to the standing committee on finance.

The Democratic Alliance’s (DA) Alf Lees asked Fuzile to elaborate on the guarantees extended to state-owned entities, in particular SAA.

Fuzile said the biggest guarantee is to Eskom, “which by the way could have been higher if Eskom was moving quick enough with its build programme”.

He couldn’t give the precise figure but Eskom’s government guarantee extends beyond R200bn.

Fuzile said SAA’s guarantee is substantial, but “not that high”.

“If I’m correct, SAA’s guarantee is just under R20bn. A week ago it was R16.7bn,” he said.

Government’s total guarantees to SOEs are around R400bn, and the biggest proportion is to Eskom, Fuzile said.

He pointed out though that there is a strict process before guarantees are granted.

“We have a very solid institutional mechanism to deal with guarantees. SOEs can apply for guarantees through the shareholder department: Eskom for example would apply through the Department of Public Enterprises and SABC through the Communications Department.

“Then the shareholder department has to do its own due diligence before the application is forwarded to the Minister of Finance for concurrence.

“State guarantees can never get approved if the Finance Minister doesn’t agree to it,” Fuzile said.

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