Dante’s Inferno holds that the inscription above the gates of hell reads: “Abandon hope all ye who enter here”. The department of public enterprises might consider reading Alighieri’s 14th-century masterpiece for inspiration in producing its next annual report.
Its leaders are surely connoisseurs of divine comedy. Its minister certainly fancies himself as something of a god. On the department’s landing page one is invited right in: “The Office of Public Enterprises (OPE) was established in 1994 to champion and direct the restructuring of State-Owned Companies and to ensure their optimal economic and developmental impact.”
It gets better one level in, when you enter the department’s “vision”: “To create an enabling environment in which SOCs [state-owned companies] add real economic value by focusing on operational excellence, commercial viability and fiscal prudence. This will drive developmental objectives, industrialisation, job creation and skills development.”
Of the seven companies that fall under the OPE two sit at the core of SA’s existential economic crisis, affecting the livelihoods and futures of all her people: Eskom and Transnet. If one measures “optimal economic and developmental impact” in economic output forgone, jobs destroyed and skills chased away, the department could be considered highly successful.
The most recent national budget reveals that average return on equity for all state-owned enterprises has deteriorated to -14.6%. So during a week where load-shedding returned and third-party access to Transnet’s rail network has been flagged as a non-starter by private operators willing to stump up the billions Transnet Freight Rail can’t afford to, you would expect to hear something from public enterprises minister Pravin Gordhan.
This would include reassurance that the unbundling of Eskom is progressing with renewed urgency, that the department is working with the National Energy Regulator of SA and the department of mineral resources & energy on overcoming the regulatory and licensing challenges that still obstruct the rapid rollout of independent power under the raised self-generation cap of 100MW, dealing with the issues emerging from the amended Electricity Regulation Act, and having a word with Transnet Freight Rail CEO Siza Mzimela about why auction terms have been released that appear designed to fail.
None of that though. The first statement from the purveyors of economic dynamism and the developmental state was a terse warning to Eskom board member and Business Leadership SA head Busi Mavuso that her “unbecoming” conduct when she walked out of a standing committee on public accounts (Scopa) meeting on Friday after identifying the ANC-led government as the root cause of Eskom’s predicament, was being “given serious consideration”.
One can only hope that the consideration extends to the role ANC funding vehicle Chancellor House played in placing Eskom in the position the board finds it in and is working tirelessly to turn. “This is not our mess,” Mavuso said bluntly. “We have been brought in to clean it up but we are not going to be the fall guy for the R300bn whatever of Medupi and Kusile that have still not been completed. We are doing our best to try to complete these projects and as André [de Ruyter] said we will avail ourselves to be held accountable to ensure that Kusile is finished by 2023 but everything else, honestly, we cannot be the fall guy for this ANC-led government.”
Bravo ma’m. Thank you for speaking truth to power and not for one second letting these truth-allergic amoebas bully you behind parliamentary decorum in a house full of sleeping MPs. We the people see you, and frankly anyone without their snouts in the trough of the status quo would find it hard to disagree under the weight of evidence.
Speaking to Eskom CEO De Ruyter this week, basics like bar-coded warehousing and inventory management systems hadn’t been implemented when he took over, which led to the loss of roughly R1bn worth of spares from Tutuka power station. Staggering incompetence at best, probably systemic theft at worst.
And the situation at Transnet is now so diabolically bad that even international investors are being forced to take notice after it declared “farce majeure”, as a clever headline writer at Media 24 put it this week, over its coal line contracts. The Richards Bay Coal Terminal (RBCT) exported its lowest volume of coal since 1996 last year. Commodity prices are soaring and yet here we are losing billions in export revenue because of the dysfunctional state of our rail network.
Third-party access was seen as the hope to turn things around, to use 70% of the unused capacity on Transnet Freight Rail’s general freight lines, removing trucks from the road and also improving our port efficiency. But true to form it’s been derailed out of the starting blocks. I am reliably informed that Mzimela, when questioned by interested private operators about the auction terms at an information sharing meeting on April 8, and told that these are in contravention of cabinet’s own rail policy, stood up from her chair and informed the attendees that these were the terms, freight rail was not in charge of policy and the door was over there.
These aren’t the actions of an ANC-led government wanting to lead a significant economic reformation in partnership with the private sector. These are the actions of a hubristic ruling class, barking orders and warnings from Ptolomea, in Dante’s ninth circle of hell.
• Avery, a financial journalist and broadcaster, produces BDTV's ‘Business Watch’.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.