Conceptually, the much-awaited National State-Owned Enterprises Bill is appealing as a welcome first step towards fixing hundreds of SA’s ailing state-owned enterprises (SOEs) which are causing this economy to implode. However, the bill, which is being rushed through the legislative process, raises more questions rather than answers.
Last Friday, Pravin Gordhan gazetted the bill, which will create a 100% state-owned holding company to house yet-to-be-identified SOEs. The stated aim is to improve the management of the SOEs, separate the government’s role as owner from its policy and regulatory functions, and reduce political meddling.
It is refreshing that the government now acknowledges that it has been the problem causing many SOEs, such as Eskom and Transnet, to fail at huge cost to the economy.
The holding company will effectively replace the department of public enterprises, which is to be discontinued after the elections.
Though the intentions are noble, many questions of concern remain unanswered. First, is the new company going to absorb the current bureaucrats or be staffed by skilled professionals? Second, is replacing the so-called shareholder minister with the president a means of reducing political interference? Third, will the government be bold enough to openly privatise the so-called strategic SOEs it has run down? And finally, will the president develop the courage to shepherd this through his party in an election year?
Without answers to these questions, accepting the bill may prove premature.
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.