SOEs’ cumulative losses reach almost R100 billion

Staff Writer | Jul 05, 2019
Parliament’s Portfolio Committee on Public Enterprises says it wants ‘incorruptible SOEs, profitable and sustainable’.

Deputy Minister of Public Enterprises Phumulo Masualle has assured parliament that ‘we have strategies in place’ to fix South Africa’s beleaguered state-owned enterprises (SOEs).

However, according to a statement from the Parliamentary Communication Services (PCS), the committee ‘welcomed (Masualle’s) presentation, but … said burning issues in the public domain need to be addressed. The Deputy Minister has said there are plans in place and restructuring to address challenges in SOEs, but all the public wants to know is if these will work, committee members said.’

Just last week, Democratic Alliance (DA) Shadow Minister of Public Enterprises Natasha Mazzone said in a statement the party had written to Public Enterprises minister Pravin Gordhan ‘requesting a full-scale review of our failing and debt-ridden SOEs, which have cumulative losses amounting to almost R100 billion. According to the National Treasury’s 2019 Consolidated Financial Statement report, loss making public entities racked up a consolidated loss of R50.65 billion in 2016/17 and R45.82 billion in 2017/18.’

At this week’s portfolio committee briefing, chairperson Khayalethu Magaxa said: ‘We want to take the process forward and deal with problems in SOEs. We want incorruptible SOEs, profitable and sustainable’, according to the PCS statement.

It said Masualle had told the committee: ‘Yes, there are challenges in SOEs – the balance sheet, debt, but we have strategies in place.’ The implementation of these plans ‘will get SOEs back on their feet’, the statement quoted him as saying.

It added: ‘The committee also noted with concern employment equity challenges and the failure to reach targets, especially for people living with disabilities. The committee wanted to know what is being done to address this.’

In last week’s statement, the DA’s Mazzone said: ‘We cannot be sentimental about SOEs when they add little to no value to the people of South Africa and the economy. The country is in crisis, it therefore requires urgent reforms, starting with Eskom.’

SOEs’ financial losses ‘increase on a daily basis and are proof that the status quo is no longer feasible’. These enterprises needed to be ‘completely overhauled’.

‘Their insurmountable debt poses great risks to our economy and the functioning of our society, as many of them are bankrupt and completely unable to provide the services they are mandated to deliver.’

A comprehensive review would provide South Africans ‘with a clear indication that (the government is) willing to start the process of structural change to protect our economy from further financial losses’.

 

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