Finance Minister Tito Mboweni today announced cash injections for four struggling state-owned entities, but said the time had come to reconfigure parastatals with the help of the private sector.
“Reconfiguring our state-owned enterprises requires us to take a hard look at how they operate,” he said in his maiden medium-term budget policy statement (MTBPS) to parliament.
“Our current challenges with state-owned companies present an opportunity to demolish the walls that exist between the private and public sectors.”
Earlier, in a media briefing shortly before his speech, Mboweni mooted the closure of failed state-owned companies if need be.
He mentioned the closure of Swissair in 2002, after it was kept alive by the Swiss Federal government for years.
“They decided to close it and invite those who knew how to run airlines to start it over.”
The MTBPS makes provision for a special appropriation of R5 billion for South African Airlines, and R1.2 billion for sister company South African Airways Express, that saw its fleet grounded in May because it could not perform maintenance.
It cautions that unless state-owned entities were restructured, there was a risk that these would put “major pressure” on public finances.
The adjusted appropriations further free up R2.9 billion for the South African Post Office and for the South African Passenger Rail Agency, R5.8 billion.
Asked about the risks posed by power utility Eskom’s debt burden, Mboweni said one could only see the wisdom of restructuring the entity.
He went on to suggest that those who opposed it were clinging to outdated models.
“Otherwise you are stuck in the 1950s.”
Public Enterprises Minister Pravin Gordhan have in recent months appeared to have been hinting at the unbundling of Eskom’s generation and transmission capacities, but there has been no formal statement from government on the matter.
In his prepared speech, Mboweni said government has begun to study long-term reforms in electricity, telecommunications, transport and logistics.
– African News Agency (ANA)