Posts Tagged ‘bailout’

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From bonuses to bailouts – Eskom’s financial mismanagement

28 August 2009

Eskom’s negative financial results exposed the fallacy that the ANC government was able to run state owned enterprises (SOEs) in “the public interest”, the Democratic Alliance said on Thursday.

The parastatal last week reported a R9.7 billion loss for the last financial year.

In 2007/8 Eskom had to be bailed out to the tune of R60 billion.

“It appears that Eskom needs an additional R 283 billion for its capital expenditure program,” said DA Shadow Minister of Public Enterprises Manie van Dyk. “As a consequence, it seems likely it will once again have to be bailed out, a cost that will be borne by the South African taxpayer.”

Van Dyk said Eskom’s results called into question whether government was either willing or able to manage SOEs to the benefit of the public, and whether it was not simply a way to entrench the system of cronyism that was eating away at the social fabric.

“The awarding of bonuses to senior management, despite the financial crisis, exacerbates Eskom’s situation,” he said.

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