Provision for the state’s Asset Management Company to oversee dysfunctional state-owned entities (SOEs) was counter-productive and rendered the National Enterprises Bill undesirable.
So reacted the official opposition on Sunday, with DA public enterprises spokesperson Ghaleb Cachalia saying that establishing a brand new SOE with its bureaucracy and budget was proposing another vehicle to perpetuate corruption and maladministration.
“The bill would have been beneficial if its sole focus was to create pathways through which private investment could start flowing into the SOE sector, as originally intended.
“The DA’s stance has always been that SOEs should either be privatised entirely or opened up to public-private partnerships to improve efficiencies and increase innovation,” Cachalia said.
He made the comment after the government published the National State Enterprises Bill for comment on Friday, after approval earlier in the week by the Cabinet.
Minister in the Presidency Khumbudzo Ntshavheni said last week that the draft bill proposed the consolidation of the state’s shareholdings in strategic SOEs and the establishment of the state’s Asset Management Company as a holding company for state shareholding of strategic SOEs.
The bill provides for the state as the sole shareholder of a holding company and consolidates the state’s shareholdings in state enterprises.
It will also authorise the transfer of the shareholding of state enterprises to the holding company to ensure the operation of state enterprises are supervised by the holding company.
The public have until October 15 to make written comments on the bill.
Cachalia said that the ANC government has opted for more state control and centralisation of the SOE sector.
“This will drive away the badly needed private equity investment, leaving these crisis-ridden companies exclusively dependent on taxpayer-funded bailouts.
“The challenge is, these bailouts will become increasingly difficult to come by as National Treasury has effectively told the country that the state coffers are empty and everyone needs to tighten their belts,” he said.
Public Enterprises Minister Pravin Gordhan defended the bill, saying the model would have the advantage of separating the state’s ownership functions from its policy and regulatory functions, minimising the scope for political interference, and introducing greater professionalism into the entities.
He said that the new model would replace the Department of Public Enterprises, which would cease to exist.
It is unlikely that the bill will be processed before next year’s election and Gordhan’s plan clashes with the ANC view on SOEs, with the party resolution preferring that all state-owned companies return to their line departments, especially Eskom which they believe should fall under the Department of Energy.
Cape Times