DA sets out six-point rescue plan for state-owned enterprises
The DA has put forward a six-point rescue plan which it believes will transform state-owned enterprises (SOEs) and lift them out of their current debilitated state.
The plan was released on Tuesday by the party’s spokesperson on public enterprises Natasha Mazzone, accompanied by spokesperson on communications Phumzile van Damme, and transport spokesperson Manny de Freitas.
The six key points of the turnaround strategy are de-politicising SOEs; introducing professional expertise into their governance; a focus on competitiveness; good governance based on transparency; introducing private equity partners; and streamlining government oversight.
"SA simply cannot afford to continue down the downward spiral of under-performing and financially distressed parastatals. The DA’s action plan will go a long way in ensuring that good governance and efficiency is restored in our SOEs," Mazzone said at a media briefing.
"It is evident that SA’s SOEs are in serious financial distress. This is largely due to state capture, corruption, financial mismanagement, poor governance and a general lack of state oversight."
Regarding de-politicisation, Mazzone criticised the political appointments to the boards of SOEs through the cadre deployment policy of the ANC. "Not only does this lead to stagnation, but also opens parastatals to the possibility of being captured by political rent-seekers or connected individuals," she said. Board members should be appointed on the basis of their business knowledge and expertise and should be vetted for political connections and conflicting business interests.
Instead of a multiplicity of often conflicting financial and social objectives, SOEs should have clear mandates that set financial objectives and sustainability as their primary goals. A performance-based culture should be developed and non-core activities and assets need to be examined and, if necessary, sold off, franchised, outsourced or terminated.
Mazzone also argued that the governance of SOEs should become more transparent to minimise the opportunity for corruption. "A major reason for the corruption is the lack of clear and transparent procurement of contracts and tenders for politically connected parties, which have hampered service delivery."
She called on the government to accelerate the introduction of private equity partners. "It is unsustainable for the government to continue to support financially unviable SOEs." The government needed to look at the partial or full privatisation of a number of SOEs by bringing in private equity partners and urgently disinvesting from non-core companies.
On streamlining government oversight, Mazzone believed it was urgent that the "ineffective and, frankly, pointless" Department of Public Enterprises be dissolved and for SOEs to be managed by their relevant departments, such as Transnet by the Department of Transport; Eskom by the Department of Energy; and Denel by the Department of Defence and Military Veterans. She argued that this would improve the lines of accountability and communication, and also align the SOEs with the efforts of their rightful portfolio.