DA welcomes Gordhan’s interventions at SOEs

24 May 2018

The DA welcomes Public Enterprises Minister, Pravin Gordhan’s announcement today of the interventions he has made at struggling state-owned entities (SOE).

The Minister announced that Mr Phakamani Hadebe has been appointed as the permanent CEO of Eskom, that a new board has been appointed at SA Express as well as Cabinet’s approval of the new interim board appointments at Transnet and Denel.

The Minister has had a great opportunity serving on the Public Enterprises Portfolio himself and seeing first hand, the many issues that arise.  We are pleased that the Minister has worked closely with the DA and other opposition parties.

We would like to commend the Minister on the speed in which he has implemented interventions at SOEs, especially the good work that has been done by his intervention team at SA Express.

It was revealed today that the Minister’s intervention team discovered that the airline entered into a R5.7 million deal with Gupta-linked, Trillian, for advisory services and capital raising without following due process. Furthermore, the team also discovered a dubious fuel contract worth R67 million at SA Express.

One point of concern is the appointment of Mr Ronald Lamola on the SA Express board as he is an ANC NEC member which presents a possible conflict of interest. It is for the same reason he resigned as Chairperson of the Media Development and Diversity Agency.

Despite these interventions, the DA maintains that our SOEs require a complete turnaround strategy to restore good governance, public trust and most importantly service delivery

The DA has a six-point rescue plan for SOEs which is centred on revitalising our parastatals and restoring good governance. This plan focusses on:

De-politicalising SOEs by doing away with the ANC’s cadre deployment policy. We need to introduce a Code of Good Practice, stringent vetting processes and lifestyle audits to attract skilled and knowledgeable candidates;

Introducing professional expertise in order to create environments in which decisions are made with profitability or sustainability in mind, by revamping employee-compensation systems;

A focus on becoming competitive as SOEs have become bloated and inefficient. SOEs need to have clear mandates that set financial objectives and sustainability as primary goals;

Good governance based on transparency in order to minimise the opportunity for corruption. This can be done by making tenders of a certain value, performance agreements with executives and monthly progress reports public;

Accelerating the introduction of private equity partners. This requires the government to look at the partial or full privatisation of a number of SOEs by bringing in private equity partners and disinvesting from non-core SOEs urgently; and

Streamlining government oversight by dissolving the ineffective Department of Public Enterprises and manage the SOEs under their rightful Departments.

The DA will continue to monitor the progress of SOEs and we will not shy away from holding Minister Gordhan accountable.

Issued by Natasha Mazzone, DA Shadow Minister of Public Enterprises, 24 May 2018