The department of telecommunications and postal services has started to accelerate the rationalisation of state-owned entities (SOEs) to save money.<\/p>\n
Minster Siyabonga Cwele on Tuesday said that the programme to rationalise SOEs was under way to limit the duplication of work among various entities.<\/p>\n
Cwele’s department looks over state-owned companies such as the South African Post Office (Sapo), connectivity firm Broadband Infraco and signal provider Sentech.<\/p>\n
\u201cWhat was actually driving this [programme] is we were actually trying to avoid duplication where we invest in companies who do exactly the same thing as each other when we\u2019ve got limited resources to sustain both,\u201d Cwele told a media briefing following the department\u2019s budget vote on Tuesday.<\/p>\n
\u201cThe process as you know is being led by the deputy president and we are looking at all state-owned entities,\u201d Cwele added.<\/p>\n
The statement follows President Jacob Zuma\u2019s State of the Nation speech in which he said that the government was intent on saving money and would investigate the rationalisation of SOEs.<\/p>\n
\u201cThose companies that are no longer relevant to our development agenda will be phased out,\u201d Zuma said.<\/p>\n
Cwele said that the department would investigate private sector partnerships to drive government\u2019s goal of universal broadband, estimated to cost about R60bn.<\/p>\n
\u201cThat work has not been concluded yet; we are working very closely; we are meeting every two weeks under the guidance of the deputy president,\u201d he said.<\/p>\n
However, the minister quashed rumours of a possible sale of SOEs such as Broadband Infraco (BBI).<\/p>\n
\u201cThere is no privatisation at this stage \u2013 it is more about strategic partnerships,\u201d he said adding that the department would provide cabinet a progress report in July.<\/p>\n
In 2015, BBI revealed to the portfolio committee that it required an urgent cash injection of R243m. It also wants a further R932m in funding until 2019 on top of R1.8bn that government had allocated to the entity.<\/p>\n
Treasury has rejected appeals from Cwele\u2019s department for additional BBI funding.<\/p>\n
Cwele said that the department would investigate synergies between SOEs BBI and Sentech, as well as listed companies like Telkom in the roll-out of broadband.<\/p>\n
\u201cSentech through its infrastructure – some of it is lying idle now because of the delay in DTT [digital terrestrial television]. It can be used for broadband connectivity and infrastructure.<\/p>\n
\u201cThat\u2019s the type of partnership and rationalisation we are talking about,\u201d Cwele added.<\/p>\n
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