The public enterprises department missed about a third of its performance targets for the past financial year, notably goals related to the struggling state-owned airlines and Transnet.<\/p>\n
In the department’s annual report tabled in Parliament on Thursday, Auditor General Terence Nombembe blamed lapses in strategic planning for public enterprises falling short on 26 of 81 targets for 2012\/13.<\/p>\n
In the case of SA Express, the troubled regional state-owned airline, the department failed to complete the assessment of its annual report and its corporate plan.<\/p>\n
SA Express failed to submit the latter after its finances fell into such disarray that its accounts were handed over to the AG last year.<\/p>\n
Public enterprises said in its report that further discussions with SA Express were necessary to fine tune a market demand strategy. This was echoed on Wednesday by SA Express chairman Andile Mabizela, who reportedly said the carrier had to consider how it could capitalise on opportunities in Africa.<\/p>\n
Public Enterprises Minister Malusi Gigaba confirmed earlier this month that the state was planning to integrate SAA, SA Express, and low-cost airline Mango as separate brands into a single holding company as part of the long-awaited turnaround plan for SAA.<\/p>\n
The annual report states that the department failed to determine and implement appropriate capital structures for SAA and SA Express.<\/p>\n
It said it gave priority to the turnaround plan and the need to “maintain going concern status of the airlines”.<\/p>\n
The capital structures assessment would form part of the development of the turnaround plan, to be concluded in the current financial year, the report added.<\/p>\n
Announcing the plan a fortnight ago, Gigaba declined to put a figure on the state funding that would be required to keep SAA in the air or to give a deadline for a return to profit.<\/p>\n
SAA reported a loss of R1.25 billion last year and is being kept alive by a R5bn National Treasury guarantee.<\/p>\n
SA Express this week reported a profit of just R650,000 after posting a loss of more than R300 million last year.<\/p>\n
According to its annual report public enterprises failed to agree to a shareholder compact with Transnet after disagreeing with the freight company’s plans to budget for a financial loss.<\/p>\n
Transnet has undertaken an ambitious seven-year, R301bn capital expansion programme, of which it is funding two-thirds from cash generated from its operations.<\/p>\n
The AG gave public enterprises an unqualified opinion but faulted it for lacking reliable back-up information for its financial reports.<\/p>\n
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