By Lehlohonolo Lehana.
The Department of Public Enterprises (DPE) has published the new Draft National State Enterprises Draft Bill 2023 for public comment, which looks to create a new state-owned holding company.
The department will no longer exist following the 2024 elections, with a new state-owned holding company – the State Asset Management SOC Ltd – instead managing the finances of the nation’s various state-owned enterprises (SOEs).
The move follows years of mismanagement and corruption at state companies that cost South African taxpayers billions of rand. Eskom’s failure to meet electricity demand is has resulted in years of blackouts that have constrained output, while Transnet’s inability to run rail operations at capacity impairs mineral exports.
Should the bill pass, the new company will likely be established after the next government takes office after next year’s election.
DA MP Ghaleb Cachalia said while the bill seeks to enable private equity investment in strategic SOEs and they “welcome development that aligns with long-standing DA policy, the bill’s provision for a new shareholding company to oversee the dysfunctional SOEs is counterproductive and renders it undesirable”.
“Establishing a brand-new SOE – with its own bureaucracy and costly operating budget – as the panacea that struggling SOEs need to get back on track is merely proposing another vehicle to perpetuate corruption and maladministration by connected cadres.”
Cachalia said the bill would have been beneficial if its sole focus was to create pathways through which private investment could start flowing into the SOE sector, as originally intended.
“Our stance has always been that SOEs should either be privatised entirely or opened up to public/private partnerships to improve efficiencies and increase innovation.”
He said instead, the ANC government had opted for more state control and centralisation of the SOE sector.