In tabling the budget vote for the Department of Public Enterprises in the National Assembly, Minister Pravin Gordan recommitted state-owned enterprises (SOEs) to social justice and the economic well-being of all South Africans. “Our resolve is to reclaim the SOEs from criminals and the clutches of state capture,” he said.

Energy, ports and logistics remain the department’s key priorities to achieve an inclusive economy that creates jobs and fosters business confidence. However, SOEs will be unable to achieve this without visionary leadership to guide the execution of their mandate and create a capable state. These priorities are a response to the findings of the Zondo Commission of Inquiry, which laid bare the abuse to which SOEs have been subjected and the imperative for their reform.

Part of the department’s intervention in this regard is to optimise and streamline its business and bring it in line with the fourth industrial revolution to “advance new systems of accountability”. The Presidential SOEs Council has been set up to achieve this goal, the Minister said. Meanwhile, the proposed Centralised Shareholding Model is intended to improve the efficacy of SOEs, he noted, with an infusion of the required skills. In addition, the management and finances of various SOEs will be undertaken to determine which should be retained or closed down.

Turning his attention to Eskom, Transnet and South Africa Airways (SAA), the minister was pleased to report that the National Treasury’s absorption of R254 billion in Eskom debt has given the SOE some leeway to reconfigure its generation capacity and to expand its grid to accommodate renewable energy. On Transnet, he reported that the department’s priority is to digitise and introduce new technology in its business processes to improve efficiency. This will be coupled with reforms to optimise public and private sector synergies to bring about freights transition from road to rail.

Participating in the debate on the budget vote, a member of the Portfolio Committee on Public Enterprises, Mr Nkosinathi Dlamini, said: “Our concern as the committee is to ensure that SOEs balance the commercial and non-commercial mandates efficiently. This is to improve their service delivery mandate, while they remain competitive.” This dual mandate will be achieved, he claimed, with the restructuring and reform of the SOEs. He cited Eskom, Denel and SAA as examples of this. Denel is now repositioned to “keep up with new technological developments in the field of defence and will now be better positioned to support black and women-owned businesses through local procurement strategies and a new policy framework that supports industrial development.”

Mr Ghaleb Cachalia of the Democratic Alliance said: “We are here to address the negligence and incompetency of the Department of Public Enterprises. The department should be the custodian of SOEs, but it’s an accomplice in their downfall,” he alleged. This department is meant to guide and nurture the SOEs, advise and monitor their targets, but it has forsaken its duty through gross mismanagement, which has facilitated corruption and led to their demise, he claimed. Now, the companies that were a pride of our nation lie in ruins and have failed to deliver on their mandate and contribute to the economy.

Also participating in the debate, Ms Omphile Maotwe of the Economic Freedom Fighters said the current confusion between the departments of Mineral Resources and Energy and Public Enterprises and the Minister of Electricity is a clear indication that this department should not exist. “Our proposal is that SAA and Transnet should be under the transport ministry, Denel under the ministry of Defence. She added that to have one minister as government shareholder of SOEs is not sustainable.

“Under your stewardship, the SOEs have abandoned their mandate of being commercially viable, of operational excellence to drive fiscal prudence and industrialisation. Instead of creating jobs, SOEs are shedding them. Instead of industrialisation, SOEs are being privatised. The current state of SOEs will remain your legacy,” she claimed.

Abel Mputing
24 May 2023