PUBLIC ENTERPRISES COMMITTEE SAYS SOES ARE LOSS-MAKING

Parliament, The Portfolio Committee on Public Enterprises expressed concern about the performance of state-owned enterprises (SOEs). The committee received a presentation from the Department of Public Enterprises on third-quarter performance for 2019/20. The committee was concerned to hear that all SOEs are loss-making, with the exception of the South African Forestry Companies Limited (Safcol).

The committee heard that Transnet’s overall shareholder compact performance has dwindled from 49% in the first quarter to 41% in the second quarter and 32% in the last quarter of the period under review. Committee Chairperson Mr Khaya Magaxa said that the regression at Transnet is of concern, as the entity was previously considered more successful.

On the issue of Eskom’s roadmap to guide the unbundling of the power entity, the committee said it needs to be briefed on developments with the roadmap. The department agreed to provide the committee with this. The committee further resolved that the department should furnish such an update every time the committee meets.

Regarding Denel, the committee was of the view that its performance is unsatisfactory, due to cumulative losses.

The Acting Director-General for the Department of Public Enterprises informed the committee that the challenge at South African Airways (SAA) is that the business rescue plan needs to be finalised. This plan will inform the shareholder of the funding required to make the business sustainable. The deadline for this plan is the end of the month. The committee said that a plan to find common ground between SAA and South African Express (SAX) must be adopted, as these two companies are government-owned.

On the Alexkor administration appointed in September 2019, the committee said it will invite the administrator to brief the committee on the scope of work completed and the interventions made.

The committee said the department’s presentation on SOEs painted a dismal picture. SOEs are rife with governance challenges and financial distress, as a result of corruption, said Mr Magaxa.

Source: Parliament of the Republic of South Africa