The government maintains it is committed to funding SA’s state-owned enterprises (SOEs), which are prone to corruption and inefficiencies, saying that recapitalising the ailing entities is necessary to fuel SA’s stagnant economy.
Public enterprises deputy minister Obed Bapela told parliament’s portfolio committee on public enterprises on Tuesday the government is open to renew a debate on recapitalising of SOEs.
“The economy is growing at this level, the infrastructure is not enabling that growth,” Bapela said on the need for a “debate” on the issue.
He added that this would not amount to a bailout, but would be apart of SA’s infrastructure build programme.
This comes following strong opposition from within government to electricity minister Kgosientso Ramakgopa’s suggestion that money be pumped into ageing power plants to keep the light on amid worsening load-shedding.
Eskom’s coal plants are mostly old, poorly maintained and prone to breakdowns, forcing the utility to impose various stages of load-shedding often at short notice.
Extending the lifespan of the coal plants comes as the government faces mounting pressure to resolve the energy crisis, infrastructure bottlenecks and rising unemployment.
The state capture commission, headed by chief justice Raymond Zondo, found SOEs including Transnet, Denel and SAA were at the heart of state-sponsored looting that saw them hollowed out and lose billions of rand for the benefit of a corrupt, politically connected few individuals and businesses.
Though the government has begun work to recover the money, such as instituting legal action against those implicated, the financial position of many SOEs remains unsustainable. They rely on regular bailouts to keep operating, placing severe strain on the fiscus.
In the decade to the end of 2021/22 fiscal year, various SOEs received a cumulative R266.6bn from the government.
But Bapela was speaking about more than just the recapitalisation of Eskom in his address before parliament on his department’s strategic plan, which came under strong criticism from opposition parties.
The SA economy is battling slow growth, with the IMF cutting its growth forecast to just 0.1% because of electricity shortages. The Reserve Bank expects growth of 0.2%.
DA MP Ghaleb Cachalia said SA had lost confidence in the government as the majority of SOEs were in the intensive care unit (ICU).
“Denel, the ports and on the unbundling of Eskom, what we do not see is tangible actions and times frames, and consequence management,” Cachalia said. “We fiddle when Rome is burning. We are in crisis. Where are the consequences for non-adherence?”
This evoked a strong reaction from ANC MPs and even the committee chair, Khayalethu Magaxa.
“Let’s not exaggerate the situation. Yes, most SOEs are going through serious challenges. It is not correct that all are in ICU. When a person exaggerates they promote a reaction. Let’s not be overwhelmed by ideological and political positions,” Magaxa said.
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.