Zuma needs to commit to deadline on parastatal privatisation plan
15 February 2016
Whilst the DA welcomes President Zuma’s recent utterances to implement the recommendations of the Presidential Review Commission (PRC) on the privatisation of State-owned Enterprises (SOE), we cannot allow any more delays in its implementation, especially when considering that it has been 3 years since the PRC report has been released. If President Zuma is serious about the privatization of SOE’s, he must announce a deadline for this process to be completed, otherwise this is another stalling tactic to subvert any real change.
In so doing, Parliament must exercise its powers in terms of section 55(2) of the Constitution and summon the President to account on the progress of this much-needed intervention.
To this end the DA urges President Zuma to ensure that the privatisation of SOE’s is systematically implemented without delay, beginning with SOE’s that are financially malfeasant and guzzle billions of rands every year. Specifically, South African Airways (SAA), that continuously run at a loss and have become dependent on bailouts at the expense of the taxpayer. This is the same for Eskom who at present is requesting tariff hikes in order to fulfil its mandate to supply electricity to the South African people
We hope that President Zuma is not using this report to delude potential investors and the South African public to believe that the transformation of zombie SOE’s is imminent. The only way he can prove this, is by making tangible and measurable efforts to follow through on the PRC report.
The report mentions that the PRC understood its task as that of making recommendations that would ensure that reforms are affected for SOEs to be more efficient and effective in accelerating the country’s growth and development aspirations. There are roughly 715 entities serving various social and commercial objectives at different spheres of government. The report asserts that the ability of these SOEs to remain viable while delivering on determined socioeconomic imperatives should be transparently measured through an SOE scorecard and electronic performance management system.
On the issue of non-financially viable commercial SOEs, the report states that they should be addressed through the rationalisation of SOEs based on certain criteria, injecting private sector practices and therefore gradually phasing them into commercial entities with a mix of public and private equity ownership, or completely disposing of them as state entities.
We, at the DA, support partial privatisation to bring in much needed private capital, industry expertise and skills and reduce the drag on the fiscus. With the ratings agencies monitoring our country very carefully, the need to reduce the deficit is paramount, especially SOEs that keep requiring state funds to prop them up. Non-performing SOEs such as SAA and Eskom should to be partially privatised swiftly.
Statement issued by Natasha Mazzone MP, DA Shadow Minister of Public Enterprises, 15 February 2016
