Gama saga is one of many mismanagement examples at SOEs

The corruption charges concerning Siyabonga Gama and his role at Transnet are only the latest in a long list of examples of poor management and maladministration at South Africa's public enterprises (see report). Against a backdrop of poor financial management, bailouts and poor fiscal discipline the evidence continues to mount that the ANC government is simply unable to manage public money or public institutions.

Recently deputy general-secretary of the South African Communist Party Jeremy Cronin warned in a defence of our parastatals that "where there is public money and strategic incoherence you create a breeding ground for corruption and collusion." He couldn't have been more right, and Transnet is a prime example of this well-established trend.

Consider the following examples:

• Land Bank (2009): An investigation exposed that more than R1bn in funds was used fraudulently as a result of widespread mismanagement and corruption at the most senior levels of the entity.
• SAA (2009): CEO Khaya Ngqula was fired for orchestrating an illegal catering deal worth R3.4 billion between SAA and a consortium involving businessman Vusi Sithole, a business partner of Ngqula's wife. To add insult to injury, he was subsequently given a golden parachute estimated to amount between R5 million and R8 million.
• Eskom (2009): Eskom management awarded a "fatally flawed" tender to Kwanda Ferro-Alloy African Resources, which was set aside in court. The court found that Eskom had awarded the tender to Kwanda in contravention of its own requirements; Kwanda could not submit its financial statements, it had no experience in scrap metal and did not have the necessary skills or equipment.  Eskom and Kwanda were forced to pay the competing bidder's legal costs.
• Denel (2009):  Denel management admitted to bribery four years ago in the supply of anti-material rifles to India.  Denel this year lost R2-billion in revenue after it had been "blacklisted" from selling weapons to India over the past four years (click here to read Denel's denial of this claim - Ed).

So, on the one hand we have a series of public entities that are in dire financial straits; on the other hand their leadership is compromised or embroiled in maladministration. The combination of these two things is an ever-declining lack of public faith in the government's ability to deliver services and manage taxpayer's money.

This past week the two green papers setting out government's rationale for the National Planning Commission and the Monitoring and Evaluation Units in the Presidency were made public. Both of these green papers recognise the more general problem that is epitomised by our parastatals - a lack of planning and co-ordination. But they fail to identify the more basic, fundamental shortcomings: a lack of skills, poor sounds financial management and a disdain for best corporate practice. Without these basics in place any overarching scheme will be undermined before it is put in place.

And, of course, there are various political considerations which need to also be taken into account - cadre deployment for example. Monitoring and evaluation will only be as effective as the pool of people being evaluated allows for. And if public servants are chosen, first and foremost, because of their political credentials - as opposed to their expertise - the bar will automatically be lowered, and standards will fall regardless of how well those people are evaluated.

Statement issued by Manie van Dyk, MP, Democratic Alliance shadow minister of public enterprises, September 7 2009

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