Nene's approach to state-owned enterprises questioned
Experts say the finance minister isn't serious enough about the financial crisis in state-owned enterprises.
JOHANNESBURG - Unions, experts and economists have raised concerns about Finance Minister Nhlanhla Nene's approach to state-owned enterprises, saying he's not serious enough in tackling the financial crises at the Post Office, Eskom and South African Airways (SAA).
In his budget speech on Wednesday, the minister admitted the financial position of some state-owned enterprises undermines their ability to contribute toward development.
The Communication Workers Union (CWU)'s Clive Mervyn has lashed out at government for its poor attempts to bail out the Post Office.
"We're worried about how government is not taking this entity very seriously. Eskom has been given a serious lifeline, it's been given lifelines continuously. Maybe the minister must tell us that he wants to privatise the Post Office because maybe that's their agenda."
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Nene also touched on the energy crisis, warning its the most significant issue holding back the economy.
He says government will pay the first part of Eskom's R23 billion bailout in June.
But energy expert Chris Yelland says the minister failed to deal with the underlying structural problems at the power giant.
"There's nothing new on the recapitalisation of Eskom. There was of course an increase in the generation levy and this will raise an extra R4 billion per year from the electricity customer in the form of increased tariffs."
Chief economist at Investec, Annabel Bishop, says more can be done to better manage Eskom but it seems government has a handle on the problem.
In his speech, Nene said the electricity crisis is the most significant issue holding back the economy.
Nene said that if Eskom isn't able to sustain power generation, government will consider converting its R23 billion loan into equity.
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