Parliament, Wednesday, 3 February 2021 – The Department of Public Enterprises appeared before the Portfolio Committee on Public Enterprises today to report on, among other things, progress made in addressing challenges facing the country’s state-owned enterprises (SOEs) and updates on the work of business rescue practitioners of the South African Airways (SAA), SA Express Airways and on companies that have not tabled their annual reports.

Leading the department, its Minister, Mr Pravin Gordhan, did not mince his words when he stated that the challenges that the SOEs are faced with are partly historical. Tthey are reflective of where we come from as a country and this has impacted negatively on the current financial and operational status of many SOEs.”

He told the committee that the endeavor to correct the wrongs and inefficiencies that beset the SOEs is a thankless task. “What we have embarked on is not an easy road. But we are doing all we can and working hard to restore the operational and financial viability of the SOEs,” said Mr Gordhan.

The Director-General of the department, Mr Kgathatso Tlhakudi, gave a broad overview of the progress, challenges and mitigating intervention that the department has adopted to turn the SOEs’ fortunes around. Of all public entities, Eskom has become a major concern because of the impact of its load shedding practice on the economy. According to Mr Tlhakudi, Eskom’s Recovery Road Map is well on course and various inroads have been registered to improve Eskom’s financial viability and to restore ethical conduct to improve good governance.

He said the unbundling of Eskom into three categories: Generation, Transmission and Distribution as independent legal business entities is well under way and the department is pinning its hope of Eskom’s turnaround strategy on it. On the performance of the generation unit of Eskom, he said the cause of load shedding is due to ageing plants and as a result Eskom funds have been redirected from capital programmes to maintenance.

Regarding debt owed to Eskom by municipalities, he is content that there is progress in this regard. He said more than ever before there is an up-tick of payments and improved collection in this regard.

Turning on SAA’s mounting woes and the interventions implemented thus far, he claimed that positive strides have been made as a result of the recent R10.5 billion injection that forms part of the SAA rescue plan to prevent the airline from total collapse, a process that is currently handled by Business Rescue Practitioners.

He said to date, a new board of SAA has been appointed. It has been charged with a task of appointing a new SAA’s executive to turn the fortunes of the airline around. Regarding SA Express’s impending sale, he reported that buyers have been identified, and the purchase price of SA Express has been agreed upon. And in the next three months a new shareholder structure will be in place.

As part of its social responsibility to workers who were retrenched at SAA, the department joined forces with the Department of Labour and Higher Education to impart business and competency skills to those affected to ensure that they could either open their own businesses or be employable in future in other sectors of the economy,” he said.

The Chairperson of the committee, Mr Khaya Magaxa, proclaimed that not all is doom and gloom. He cited the R1.56 billion recovered by the SIU on unlawful contracts at Eskom as a case in point. He said: “The corruption uncovered at Kusile cannot be overlooked. This is a good example of the work that is being done to uncover money from graft and corruption. But we would like this to be emulated in other SOEs.”

The committee wanted to know what is the department doing to address unplanned load shedding and the continuous need for plants maintenance. Mr Gordhan said that is the most difficult area they have to deal with. “The Eskom board has appointed a head of generation to ensure that there’s a standardised operational conduct and there is consequence management if standards are not met,” he said.

On revelations at the Zondo Commission, the committee wanted to know if the department is tracking the forensic reports emanating from the Zondo Commission to ensure that those implicated in wrongdoing are not still in the department’s employ. I was told that there is a unit in the department that tracks these forensic reports and relay them to the Specialised Investigative Unit (SIU).

Mr Magaxa added: “The evidence of corruption that emanates from the Zondo Commission must lead to arrests and the recovering of public funds.”


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