{"id":32486,"date":"2013-02-27T15:16:06","date_gmt":"2013-02-27T13:16:06","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=32486"},"modified":"2013-02-27T15:17:46","modified_gmt":"2013-02-27T13:17:46","slug":"struggling-soes-to-be-restructured","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/32486\/struggling-soes-to-be-restructured\/","title":{"rendered":"Struggling SOEs to be restructured"},"content":{"rendered":"

State-owned enterprises (SOEs) that are bleeding money could see some restructuring ahead, according to the 2013 Budget, tabled by Finance Minister Pravin Gordhan on Wednesday.<\/p>\n

These include the cash-strapped SA Airways (SAA), SA Broadcasting Corporation, SA Xpress, Denel and the SA Post Office.<\/p>\n

“During 2011\/12, (the) Airports Company [of South Africa] and Eskom recorded profits, but SAA, Alexkor and Armscor lost money.”<\/p>\n

The losses have been attributed to policy uncertainty, costs associated with non-commercial activities, operational inefficiencies and management instability.<\/p>\n

Government, as the main shareholder in SOEs, as well as the company boards, were not co-ordinating adequately.<\/p>\n

“Over time, the equity of entities that persistently lose money is gradually eroded, which eventually requires that they be recapitalised.”<\/p>\n

This meant government would have to work with the entities to develop turnaround strategies, which would include “some form of restructuring”.<\/p>\n

SAA has been mired in controversy for years, following bailouts by government, as well as the hiring, firing and resignation of CEOs and board members.<\/p>\n

Treasury granted the loss-making company a R5 billion guarantee in October last year, enabling it to borrow money to buy new aircraft.<\/p>\n

This was preceded by the resignation of some board members, including chairwoman Cheryl Carolus.<\/p>\n

Earlier this year, acting CEO Vuyisile Kona was suspended after the troubled airline’s board cited “allegations” it was investigating.<\/p>\n

\"Pravin<\/a>

Pravin Gordhan<\/p><\/div>\n

SOE’s underspend on infrastructure<\/h3>\n

According to Gordhan, SOEs (state-owned enterprises) spent 70 percent of the R131.7 billion committed to infrastructure last year (2011\/12) – failing to spend enough of their budgets on key infrastructure projects.<\/p>\n

This was an improvement on the previous year, where only 62 percent of that budget was spent.<\/p>\n

“The shortfall against budget, however, was substantial, resulting largely from procurement and project implementation delays.”<\/p>\n

The Budget document says that over the next three years, capital expenditure by SOEs is expected to reach R377.5 billion.<\/p>\n

The majority of these infrastructure projects are in the energy (Eskom), transport (Transnet) and water sectors.<\/p>\n

“Over the next three years, 43 percent of the funding required for infrastructure development by state-owned companies is expected to be raised in the debt markets, with the remainder coming from internally generated cash.”<\/p>\n

The need for private companies to “co-invest and bring technical expertise” to massive infrastructure projects is emphasised.<\/p>\n

“An example of this approach has been the renewable energy independent power producer programme, which attracted R46.6 billion worth of investments from the private sector in 2012\/13.”<\/p>\n

More on the Budget<\/h3>\n

Gordhan announces funding for Sentech<\/strong><\/a><\/p>\n

Gauteng Govt reshuffle sees focus on ICT investments<\/strong><\/a><\/p>\n

95% broadband coverage for Gauteng: Premier<\/strong><\/a><\/p>\n

Cape Town a \u2018blueprint\u2019 for telecoms in Africa?<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

State-owned enterprises (SOEs) that are bleeding money could see some restructuring ahead, according to the 2013 Budget, tabled by Finance Minister Pravin Gordhan on Wednesday.<\/p>\n","protected":false},"author":4,"featured_media":6979,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[25,5253,84,3957,5255],"class_list":["post-32486","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","tag-active","tag-budget-2013","tag-pravin-gordhan","tag-soes","tag-state-owned-enterprises"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/32486","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=32486"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/32486\/revisions"}],"predecessor-version":[{"id":32489,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/32486\/revisions\/32489"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/6979"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=32486"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=32486"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=32486"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}