Work underway to stabilise SOEs

Cape Town - Deputy President Cyril Ramaphosa says work is underway to stabilise South Africa's state-owned enterprises and set them on a sustainable path.

The Deputy President said this when responding to a question by Democratic Alliance leader Mmusi Maimane in the National Assembly on Wednesday.

Maimane had asked him if any plans have been put in place to fast-track the implementation of the recommendations of the Presidential Review Committee on State-Owned Entities (SOEs).

"Working together with various ministries and stakeholders, the Inter-Ministerial Committee I have been tasked to chair is seized with the task of strengthening the economic, social and developmental role of our SOEs.

"The Inter-Ministerial Committee is overseeing the implementation of the recommendations of the Presidential Review Committee - PRC - in a phased manner, focusing in the immediate term on stabilisation and consolidation," he said.

The Deputy President said the central challenge facing South Africa today is the achievement of faster economic growth, greater job creation and the reduction of poverty and inequality.

He said SOEs have a critical role to play as catalysts for investment, growth and employment.

The Deputy President said many SOEs are well placed to perform this role and indeed are doing so.

However, some are facing operational and financial challenges or instability at a governance and managerial level. Others are struggling to remain profitable in very difficult and challenging trading circumstances, he said.

"Work is underway within the IMC to ensure that this process is guided by a clear framework, credible evidence and, most of all, our national interest.

"As President Jacob Zuma indicated in his State of the Nation Address, this process involves streamlining and sharpening the mandates of SOEs, rationalising them where there is an overlap of mandates, and phasing-out those state-owned enterprises that are no longer relevant to our development agenda.

"In some instances, this will involve strengthening SOEs through consolidation, such as the merger being contemplated between SAA and SA Express.

"In others, it could involve the inclusion of minority equity partners leaving government as the majority shareholder," he said.

During his Budget speech last month, Finance Minister Pravin Gordhan said government would look at the possibility of merging South African Airways with SA Air Link in an attempt to streamline investment.

The Minister said at the time that government could not afford to invest in four airlines at the same time.

Deputy President Ramaphosa on Wednesday said government remains confident that these interventions will lead to the long-term sustainability of these SOEs with good corporate governance structures in place and a leadership committed to the advancement of the country's goals as set out in the National Development Plan.

SA Post Office stabilising

The Deputy President said, meanwhile, that the South African Post Office was stabilising.

A new board has been appointed, comprised of people with the requisite skills and experience to oversee the turnaround of the institution.

The Deputy President said key executive management positions, including that of the CEO, have been filled.

"In 2015, a Strategic Turnaround Plan was put in place to improve the performance at the Post Office.

"The company has been successful in reducing costs, but less successful in boosting revenues. Taking this experience into account, the company has reviewed and refined the turnaround strategy to ensure that a business model suited to the changing postal services environment is put in place.

"It is envisaged that the company's financial performance will improve and stabilise over the next financial year," he said.

He said that with various interventions being implemented, the SA Post Office has great potential to become a leading, innovative and profitable state-owned enterprise. -

SOURCE: SOUTH AFRICAN GOVERNMENT NEWS AGENCY

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