Open letter to the Mr PM Makwana, Acting Chairman and Acting Chief Executive of Eskom Holdings regarding "Invitation to Eskom to brief party leaders in Parliament" from the UDM President (14 April 2010)

Dear Sir

The abovementioned matter refers. Earlier this year leaders of political parties in Parliament met with President Zuma; among other things we asked the President to brief us on the involvement in the Eskom/Hitachi deal of an ANC-aligned company called Chancellor House. President Zuma created the impression that he had no knowledge of the deal. Again during the State of the Nation debate various political parties raised the issue of this deal, and once again President Zuma failed to take the country into his confidence. On the other hand, we have since seen reports that the President’s recent trip to Britain was used to lobby support for a World Bank loan that will make the Hitachi deal possible.

The UDM and others are concerned by the nexus between Eskom, Hitachi and Chancellor House – it seems like international companies and bidders in general are extorted to partner with ANC-aligned businesses. We witnessed similar conflicts of interest with ANC-aligned companies benefitting from the Telkom/Vodacom deal, as well as the Arms Deal.

It is a symbiotic relationship between the ruling party and structures of the state. In this case, it leads to tacit Government support for Eskom’s raising of rates (the recent 25% increase) and incurring debts (which will also be serviced by rate-payers), whilst directly benefiting the ruling party.

Due to Eskom and the Government’s failure to provide clarity regarding this deal, some political parties resorted to appealing against the World Bank loan directly with that institution. In addition Cosatu has threatened mass action.

The Public Protector has also pronounced that Eskom’s former Chairman – Mr Valli Moosa – should have recused himself from the meetings that took the decision in favour of Hitachi (and by extension approving financial gains for the ANC) because he had a conflict of interest.

We are wondering whether the recent electricity crisis was purposefully staged to create a state of panic, to ensure the approval of this massive Eskom project for the benefit of the ruling party. We can’t help but notice that once the former Minister of Finance committed R60 billion to Eskom, with assurances that additional funding would be forthcoming, the threat of power outages suddenly disappeared.

In light of the above, we urge you to come to Parliament to meet with leaders of political parties to dispel these negative perceptions that Eskom is embedded in the ruling party. Indeed demonstrating accountability to the elected representatives of the citizens of South Africa would be in line with the principles of corporate governance.

Yours sincerely
Bantu Holomisa, MP

President – United Democratic Movement
Cc. All leaders of political parties in Parliament