Communications and digital technologies minister Khumbudzo Ntshavheni says she is hopeful that the Treasury will be “generous” and reinvest some of the proceeds from the spectrum auction into her department.
This as the SA Post Office (Sapo), the technically insolvent parastatal that falls under her department, pushes for a bailout to survive.
SA’s long-awaited radio frequency spectrum auction, with multiple bidding rounds, has netted the state more than R8bn so far.
“The estimates that we have indicate that what we hoped to raise for the national revenue fund has been exceeded,” Ntshavheni told members of parliament’s communications portfolio committee Tuesday, ahead of a Sapo submission on its turnaround strategy and current financial position.
“We are hoping that there will be generosity from the Treasury on funding some of the programmes of the department. It has happened in other countries were auctions were undertaken. There was reinvestment in the sector to make sure it continues to grow,” the minister said.
Late in 2021, the department warned that Sapo would collapse without a new cash injection from the government. The department indicated that the broke entity needed as much as R8bn over the medium term to stay afloat. But the budget tabled by finance minister Enoch Godongwana in February did not allocate further funding to the company. Godongwana reiterated the “tough love” policy regarding SOEs — including no further bailouts.
Sapo, the national postal service that is meant to be a key medium of communication, especially in rural and remote areas, is on a long list of state-owned entities relying on government bailouts to continue operating. It has been hamstrung by acute management and financial problems in recent years, which have left it on the brink of collapse. It has not been profitable for the past 16 years, except in 2006, when a profit of R276m was recorded.
Sapo executives briefed parliament’s communications committee about the company’s turnaround plan and its current financial position. However, the actual presentation was closed to the public and media with the committee chair, Boyce Maneli, saying this was to “protect” the company’s commercial interests.
“Part of the information on the turnaround strategy would have created problems not only for the entity, but also for those that relate commercially to the entity … so we are conforming to the rules of the house,” Maneli said.
“This is not the first time we have faced such a situation. When we were dealing with the turnaround strategy of the SABC on matters relating to commercial [issues] we made a similar application … to make sure that we do not put the entity in an unfair situation as far as commercial interests are concerned.”
He said, however, the committee had noted that without funding, the post office’s turnaround strategy would be stillborn.
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