TAXPAYER TO FOOT THE BILL!

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TAXPAYER TO FOOT THE BILL!

THE Eskom bailout for the next two years is going to cost R60 billion – and the tax payer is going to pay for it.Yesterday, Finance Minister Tito Mboweni asked Parliament to approve the Special Appropriation Bill so funds could be released to rescue Eskom.This money is in addition to the R23 billion which was allocated to the company during the budget.He warned that tax collection will be significantly lower than expected for the 2019 budget.He said Eskom faced serious challenges that the entity had previously, which resulted in a decline in investor confidence.He said Eskom needed to be financially rescued before it sank as it would have terrible consequences. He added government was committed to supporting and strengthening Eskom so it could guarantee electricity supply.Mboweni said Eskom would have to be divided into three entities, namely generation, transmission and distribution. Some commentators have warned this would lead to parts of the power utility being privatised and electricity price hikes.“Without major changes to Eskom’s business model, the company will not be financially sustainable and may not be able to ensure security of electricity supply beyond the medium-term,” he said.“This will have significant consequences for the economy.” 

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