# Eskom bail out: From 600 trains to free higher education, here’s what R59bn could have bought

- Link: https://dearsouthafrica.co.za/2019/07/25/eskom-bail-out-from-600-trains-to-free-higher-education-heres-what-r59bn-could-have-bought/
- Published: 2019-07-25T14:36:02+02:00
- Author: dearSA

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Gibela in 2013 to modernise its outdated rolling stock with 600 new trains, 580 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.