Private firms are obligated to help capitalise SOEs, Malusi Gigaba says
The private sector needs to be crowded into state-owned enterprises (SOEs) to make the latter commercially and financially viable, Finance Minister Malusi Gigaba said Thursday.
The private sector had to share in the risks, the debt burden and the responsibility to capitalise SOEs, Gigaba said in reply to questions by members of the select and standing committees on appropriations and finance, following his briefing to them on the 2018-19 budget.
Gigaba said a "massive restructuring" of SOEs was required, which would bring on board the private sector.
He referred to the statement by President Cyril Ramaphosa that the State Owned Company (SOC) co-ordinating council would be re-established with Ramaphosa at its head.
The council would focus on clarifying the shareholder governance management of SOEs. It would streamline their architecture and establish a centralised governance model, which would assist in their improved governance and management.
The Shareholder Management Bill is expected to be brought to Parliament in 2018.
Ramaphosa also announced that he would convene a meeting with the chairpersons, CEOs and chief financial officers of SOEs to discuss with them the commercial and developmental mandates of their companies.
Gigaba said the SOC co-ordinating council would not only have to deal with the architecture of SOEs but also address their structural problems to ensure that they were commercially and financially viable.
"You do need to embark on massive restructuring of state-owned companies and bring on board the private sector," Gigaba said.
By crowding in private-sector investment and expertise, the SOEs could become financially viable. This was especially needed in those that were heavily involved in infrastructure investment such as Eskom, Transnet, the South African National Road Agency and even South African Airways.