Public enterprises minister Pravin Gordhan. Picture: FREDDY MAVUNDA
Public enterprises minister Pravin Gordhan. Picture: FREDDY MAVUNDA

State-owned enterprises (SOEs), in theory at least, are supposed to be at the centre of the government’s development agenda. From road maintenance to electricity provisioning, they are supposed to be the place where actual service delivery happens.

To say that in the recent history they have been anything but would be a gross understatement. As the Zondo commission of inquiry into state capture has laid bare, not only did SOEs not support the development agenda in the past decade, they actively sabotaged it through a culture of rampant corruption and mismanagement.

Once upon a time, Eskom was regarded as one of the top electricity companies in the world, meeting the energy needs of an industrialising economy at a reasonable price. Now it cannot even keep the lights on and public enterprises minister Pravin Gordhan is in a race against time to come out with strategies to ensure its sustainability before it sinks the whole economy.  

At the heart of all the failures in these institutions was a lack of accountability, and in this context, the cabinet’s decision to adopt strict guidelines to govern the appointments of boards and CEOs should be welcomed as a step in the right direction.

SAA, though less systematically risky for SA as a whole, is similarly in a mess and requires never-ending bailouts to keep it flying. Finance minister Tito Mboweni’s comments that it might be better to close it down were an expression of many people’s frustration, who cannot understand why a developmental state should keep pouring money into a dysfunctional airline while hospitals that serve the poor lack basics such as bed linen.

Then there’s Transnet, the biggest freight company in the country. It is key to ensuring that miners of the country’s  bulk minerals are able to get their products into world markets and earn much needed foreign-exchange revenue and support jobs.

While SA is a large global player in the production of commodities, mining companies have long identified weakness in rail capacity as an impediment to export growth.

The drama acted out in the dispute between Transnet and former CEO Siyabonga Gama, whom it eventually fired after investigations implicated him in misconduct and maladministration in the R54bn acquisition of locomotives, was symptomatic of what went wrong in the institutions.

The Zondo commission provided much detail of what happened at Eskom with its management’s dealings with Gupta-related entities during the Jacob Zuma presidency.

At the heart of all the failures in these institutions was a lack of accountability, and in this context, the cabinet’s decision to adopt strict guidelines to govern the appointments of boards and CEOs should be welcomed as a step in the right direction.

As the commission has shown, especially in the case of Eskom and SAA, a lot of the rot can be traced back to changes made early in the Zuma presidency with the appointment of compliant boards and executives, accountable only to their political benefactors.

As Gordhan noted at a recent press conference on Eskom’s financial and operational crisis: to ensure their success, the perpetrators of state capture needed to “ensure that you have the right minister in place, the right board in place and the right compliant management in place”.

One need not be a genius to work out the identities of the individuals he was referring to. But the proposed change goes beyond that, and it’s about creating an institutional framework to make sure that these companies are no longer at the whim of whoever is in power.

On their own the guidelines, which include providing qualifying principles for board appointments and specify the roles and responsibilities of those overseeing the appointments, should not be controversial. The only thing that should shock South Africans is that they are not standard already.

It was not that long ago that some senior ANC members, stung by former public enterprises minister Barbara Hogan’s testimony at the Zondo commission, were defending applying the party’s deployment policy into state institutions that require specific skills and relevant experience to be run effectively.

Earlier in 2018, President Cyril Ramaphosa said “only people with expertise, experience and integrity” should serve in these institutions, and the proposed guidelines seem to be a step in giving life to that statement.

Of course when you have an executive that is intent on inflicting damage for its own selfish ends, these won't on their own stop them.