National Assembly Debate on Eskom Conversion Bill


Delivered by
Mr. MD Msomi, MP

Cape Town: June 5, 2001

The great founder of the Rolls Royce motor manufacturer, Henry Royce, once said, and I quote:

"Let's try for perfection in everything we do. Take the best that exist and make it better. When it does not exist, design it. Accept nothing nearly right or good enough"

This is not withstanding the dream I had that one day I would own a Rolls Royce.

This Bill is part of an evolutionary process started by the Portfolio Committee on Public Enterprises in 1997 / 1998 financial year to expose Eskom to market conditions to become competitive and efficient in the global village of other energy utility entities.

The intention of the bill in intertwined with the government's strategic intent of restructuring, reframing and revitalizing the state-owned enterprises to become tax paying and dividend declaring legal entities to maximise Eskomís contribution to economic development in South Africa in which the State is the sole shareholder.

This is an empowering piece of legislation which creates an investor friendly environment, which provides for certainty in the Eskomís ability to service its debts without tempering with its asset base and gives comfort to long term loan repayments schedule.

This piece of legislation provides guarantees for the employees of Eskom even beyond the enacted Labour Relations Act passed by this Parliament to give certainty to the succession planning and long terms stability in the energy market in a manner that has not been done before.

This bill empowers the Minister with the power of discretion to ensure continuous attention to the memorandum and the articles of association and the shareholder compact to compel employees of Eskom to take responsibility for their actions in executing their mandate inline with the shareholder compact and has created a precedent whereby the shareholders compact and the memorandum and articles of association of state-owned enterprises will come before Parliament for our scrutiny where the State is the sole shareholder.

This bill seeks to reaffirm the developmental role of Eskom in providing electricity to the underdeveloped areas of our society to correct the imbalances of the past as well as to make the process transparent and subject to public scrutiny without impacting negatively on the Eskomís ability to attract inward investment.

It is very encouraging to note that the portfolio committee in its consideration to this bill took a hard line business approach on a non-partisan basis. Carrying no brief from anybody but determined to creating an enabling legislative environment to enable Eskom to become globally competitive in the market driven economy.

The IFP supports this bill. We can without hesitation state that we have had a positive effect on the final bill through our participation in the portfolio committee's deliberations. We convinced the committee to follow the correct route in converting Eskom without limiting the discretion of the Minister too much to mandatory procedures before he could execute his mandate.

What did the IFP achieve?

  1. Harmony between Eskom's obligations to long term loan repayments with social responsibility and the developmental role to poor communities; 
  2. Declared peace between the future investor demands and the hotly contested labour relations issues;
  3. Went to war with a number of stakeholders on principle-centered issues and we finally secured the peace and paved the way for this bill to become law binding upon all stakeholders and to be respected by generations to come;
  4. We exercised the constitutional mandate of the parliamentary committee's legislative role to the best of our ability in the best way possible without harming relations with the majority of the stakeholders

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