Privatise Eskom and SAA first: DA

The DA says that if President Jacob Zuma is serious about the privatisation of State-Owned Enterprises (SOEs), he must announce a deadline for this process to be completed.

On Friday, the president released a report that will guide the state’s reformation of South Africa’s SOEs.

The report advocates partial privatisation through listing and the sale of equity stakes in some state run companies.

The DA said it welcomes President Zuma’s utterances to implement the recommendations of the Presidential Review Commission (PRC) on the privatisation of some SOEs, however it pointed to the timing of the release of the report – three years following its initial publication.

The opposition party called on the privatisation of SOEs to be systematically implemented without delay, “beginning with SOE’s that are financially malfeasant and guzzle billions of rands every year”.

“Specifically, South African Airways (SAA), that continuously run at a loss and have become dependent on bailouts at the expense of the taxpayer. This is the same for Eskom who at present is requesting tariff hikes in order to fulfil its mandate to supply electricity to the South African people,” said Natasha Mazzone, DA Shadow Minister of Public Enterprises.

The DA noted that there are roughly 715 entities serving various social and commercial objectives at different spheres of government. The report asserts that the ability of these SOEs to remain viable while delivering on determined socioeconomic imperatives should be transparently measured through an SOE scorecard and electronic performance management system.

The report states that non-financially viable commercial SOEs should be addressed through the rationalisation of SOEs based on certain criteria, injecting private sector practices and therefore gradually phasing them into commercial entities with a mix of public and private equity ownership, or completely disposing of them as state entities.

The DA said it supports partial privatisation to bring in much needed private capital, industry expertise and skills and reduce the drag on the fiscus.

“With the ratings agencies monitoring our country very carefully, the need to reduce the deficit is paramount, especially SOEs that keep requiring state funds to prop them up. Non-performing SOEs such as SAA and Eskom should to be partially privatised swiftly,” said  Mazzone.

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Privatise Eskom and SAA first: DA