Strategic privatisation of state assets is possible, Cosatu says
Cosatu will consider a strategic equity partner for SAA, ‘but our conditions are that the state should remain a majority shareholder,’ says spokesperson Sizwe Pamla
Cosatu will hold discussions on economic policy with its political allies, the ANC and SACP in the next two weeks, which will include identifying state assets that can be partially privatised.
On Monday, the trade union federation's spokesperson, Sizwe Pamla, dismissed a report in the City Press newspaper that Cosatu had done a “180 degree turn” on its policy and now believed that state-owned entities (SOEs) should be privatised.
“Cosatu has a resolution on privatisation that has not changed. It was always a strategic and nuanced position that in certain sectors — electricity, water, passenger rail, municipal services — there should be no privatisation. We must make sure, for example, that the Passenger Rail Agency of SA (Prasa), which is used by eight-million working people, is not privatised. But that cannot be said about SAA, which does not have the same strategic role,” Pamla said.
The appetite in the ANC to sell a stake in SAA is also rising, as the organisation becomes disillusioned over the constant state bailouts that are required to keep it afloat. In 2019, SAA received R5.5bn from the fiscus to pay off short term debt as well as an undertaking that another R9.2bn of historic debt will be repaid on its behalf. However, it is still needs to raise at least R2bn from commercial banks to continue operations.
At the next political council of the alliance, planned for the beginning of December, Pamla said as part of a discussion on economic policy, nonstrategic SOEs or enterprises that required capital injection, Cosatu was open to talking.
“Cosatu will entertain the case for a strategic equity partner for SAA, but our conditions are that the state should remain a majority shareholder,” said Pamla.
This is the same as the ANC’s last conference resolution on private participation, which carries a proviso that the state must remain the majority owner.