Telkom deal among top 10 blunders in 2012
The trade union Solidarity says that government’s extravagance; controversial empowerment legislation and affirmative action practices; the poor handling of the Marikana massacre; interference in Telkom’s deal with KT Corp; and poor service delivery are the greatest government blunders in 2012.
The body however, praised Thuli Madonsela, the Public Protector, for her work in revealing corruption and the mismanagement of funds while the dismissal of Gen. Bheki Cele, the previous head of police, and government’s decision to not renew Jimmy Manyi’s contract as government spokesperson were also praised.
According to Moira-Marie Kloppers, spokesperson of Solidarity, government made blunders on various levels which, in many cases, resulted in irreversible damage.
“Government’s lack of action and comments after the gruesome Marikana massacre was definitely one of the greatest blunders of 2012,” Kloppers said.
The union highlighted three additional labour-related government blunders including disabling empowerment legislation through its Broad-based Black Economic Empowerment (BBBEE) Act, problems with service delivery due to the application of affirmative action, and government’s intervention in a potential deal between Korea firm KT Corp, and Telkom.
The union notes that Cabinet decided in May that the state, as the majority shareholder in Telkom, would not approve the transaction between the South Korean KT and Telkom. The envisaged agreement would have entailed KT’s buying a 20% share in Telkom for about R3.3 billion.
“Now that the transaction has been cancelled, Telkom runs the risk of gradually losing more of the market share with extremely adverse consequences for its employees’ appointments and working conditions,” Kloppers said.
The union describes government’s prevention of a deal between KT and Telkom as “a spoke in the wheels” ranking it as the fourth biggest blunder in 2012.
Telkom was previously fully owned by the state, but has since been partially privatised, although the state still owns a controlling stake in the company.
Solidarity argues that under the proposed agreement, KT would have been granted a say in certain management functions at Telkom in order to transfer the experience and expertise KT had built up in South Korea.
“KT, a state company that successfully became a private company, played a big role in the process of making South Korea a world leader in access to telecommunication. This is precisely the same ‘strategic goal’ the South African government has for Telkom. Telkom would have been able to use the capital injection for expansion,” the union continued.
With the transaction having been cancelled, Solidarity believes that Telkom runs the risk of gradually losing more of the market share with extremely adverse consequences for its employees’ appointments and working conditions.
“The loss of a possible R3.3 billion in additional capital also increases the chance that Telkom will have to cut its work force, although this will probably not happen in the near future,” it said.
The state views Telkom as a ‘strategic asset’ though which telecommunication services can be expanded and made accessible. “However, it is precisely because of the state’s hold on the company that it is unable to act innovatively to achieve these goals. The KT transaction would have broken this hold and opened the door for the delivery of new technology to many more South Africans,” Solidarity stated.
The union also fingered e-tolling as a major blunder by government in 2012, ranking it in 7th place on its list.
“It shows poor planning and unnecessary expenditure and reveals the general does-not-affect-me attitude of government to South Africans who have already been browbeaten financially,” Solidarity said of the tolling mess.
Solidarity stresses that the e-tolling system is not only a very expensive way of paying for the improvements to roads in Gauteng, but the proposed toll rates are also probably in conflict with the Sanral Act (No. 7 of 1998).
It points out that section 27(3) of the Sanral Act does not make provision for the creation of a category of road users based on their preferred method of payment. The so-called ‘penalty rate’, which targets those who do not register for e-toll or at Sanral, is therefore unlawful, it states.
“Section 27(1) of the Sanral Act also stipulates that tolls have to be paid ‘by the person who drives or uses the vehicle’. The e-toll system, according to which a vehicle owner is registered for tolls and not the driver, therefore falls outside the framework of the law,” Solidarity said.
The union maintains that the toll system combined with the current tax on petrol amounts to double taxation. An increase in the price of petrol would not have any associated collection costs.
The trade union believes that road users should receive a discount on fuel tax to avoid double taxation, once the tolling sytem is implemented. “In the meanwhile Solidarity has also criticised the consultation process followed thus far to gain the public’s approval of the project and maintains that the public was not given sufficient opportunity to comment.”
Furthermore Solidarity is of the opinion that government’s main priority is extravagance and self-enrichment. “While large scale lack of payment to service providers in the Department of Health has already lead to the loss of life and thousands of learners were disadvantaged by the textbook crisis, government spent hundreds of millions on the ANC’s centenary celebration and President Jacob Zuma’s Nkandla residence,” Kloppers said.
Solidarity called on government to specifically address these issues and act in the interest of South Africans in 2013. “Government will have to do more in 2013 than just ‘pulling up its socks’. In many cases only a new approach will be able to correct the mistakes of 2012,” the union said.
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