Eskom will be receiving a further R59bn from Treasury over the next two years to stay afloat, Finance Minister Tito Mboweni announced on Tuesday.
This lifeline comes on top of the R23bn annual inunction to the cash strapped power utility announced in February. The special appropriation bill will give Eskom R26bn in the 2019/2020 financial year with a further R33bn, the following year. Eskom’s precarious financial state threatens to swamp the country with close to R500bn in debt.
The power utility’s chairperson Jabu Mabuza who took office in 2018 described it as the “main theatre where corruption and state capture was taking place”. During Mboweni’s address on Tuesday, he too had some choice words about Eskom and other struggling state-owned enterprises.
But just how much is R59bn? Here’s what it could have bought:
1. 600 new trains
The Passenger Rail Agency (Prasa) signed a contract with newly formed consortium Gibela in 2013 to modernise its outdated rolling stock with 600 new trains, 580 to be produced in SA and 20 in Brazil. The price tag was R59bn including VAT and excluding inflation. This is not to be confused with the controversial Swifambo contract which landed a R3.5bn contract to deliver “too tall” trains.
2. Social and housing grants for one month (with some change)
Mboweni increased the budget for social and housing grants to R567bn in February. More than 17 million of the most vulnerable South Africans rely on these monthly pay-outs for their pensions, child support and disability allowances. The monthly bill for government comes to R47bn.
3. 56 state of the art schools
Menzi Primary School in Tsakane informal settlement east of Johannesburg was officially opened by Gauteng Premier David Makhura in January, having cost R105m to build. The school has room for just over 1000 learners from Grade R to Grade 7. It has 33 smart classrooms, two science laboratories, a library, IT control rooms, a nutrition centre, a dining hall, five courtyards, sports facilities and a school hall.
4. Free higher education for three years
In February 2018, then-finance minister Malusi Gigaba added R57bn for the next three years, to fund university students who come from households earning less than R350 000 per year. This followed widespread protests against the high costs of tertiary education in 2015 and 2016 and several campuses shut their doors for weeks. Zuma announced free higher education in a surprise move, in December 2017, ahead of the ANC’s pivotal conference.
5. Almost 2X eToll debt
The issue has divided the ANC and has caused widespread unhappiness among South Africans. National Treasury told the National Council of Provinces earlier this year that scrapping eTolls will cost the state R11.2bn in unguaranteed debt, on top of the current R19bn in guaranteed debt.
Bonus: 23 Nkandlas
Containing a fire pool, a chicken run and upgrades to a tuckshop, the hefty price tag for security upgrades to former president Jacob Zuma’s Nkandla homestead came to R246m. Following a damning report by then public protector Thuli Madonsela in 2014 and various legal battles, he took out a second home loan in 2016 to repay R7.8m to the public purse.