Outa demands forensic audit of Eskom

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The Organisation Undoing Tax Abuse has fired its latest salvo in the direction of Eskom, calling for a forensic audit into the parastatal’s finances.

Outa has pointed to Standard & Poor’s decision to downgrade Eskom’s long term credit rating from BB+ to BB at the weekend. S&P cited uncertainty over future tariff rates due to Eskom’s ongoing court battle with the National Energy Regulator of South Africa (Nersa) as one of the main reasons for the downgrade.

Outa has slammed Eskom saying that its years of financial mismanagement that have brought the parastatal to this point and a full audit is now needed. It’s pointed out that the damage both to Eskom and South Africa’s economy could have been far worse had electricity tariffs not been so high and the fact that the government has guaranteed to prop up the parastatal’s balance sheet with R358 billion of taxpayers’ money.

“Under any normal circumstances, the need for suretyships by lenders, would immediately signal that borrowings have exhausted their own balance sheet, and that extreme caution is required with forward financial lending,” Outa said in a statement.

“Yet in Eskom’s case the result was the extreme opposite as this state owned entity has gone on a spending spree that will require another R500bn over the next five years, and a further R1 trillion plus thereafter, if they are allowed to proceed with the nuclear power project.”

This is the second pop Outa has taken at Eskom this month. A couple of weeks ago, Outa called on Eskom not to go ahead with its plans for nuclear power stations until it revised its Integrated Resource Plan.