Gordhan: SOCs can't continue to borrow their way out of debt
The minister has told the Public Enterprises Portfolio Committee that it will to take time to recover from the widespread corruption that gripped some parastatals.
CAPE TOWN - Public Enterprises Minister Pravin Gordhan says it could take up to nine months to stabilise state-owned companies (SOCs).
He’s told the Public Enterprises Portfolio Committee that it will take time to recover from the widespread corruption that gripped some parastatals.
Gordhan says the inefficient running of these companies is impacting the economy and they can't continue to borrow their way out of debt.
Five months in, the clean-up process at state-owned enterprises has only just begun.
Gordhan says corruption and state capture have had a dire impact on SOEs.
“Cleaning up the past is not going to be easy because you've also got to face the challenges of the current period. And the boards suddenly have the determination to do as much cleaning up as possible.”
While Eskom has managed to secure $1.5 billion in foreign investment, most SOEs are still in a cash crunch.
#SOEs Parastatals in this portfolio (excluding SAA which was recently moved back to this portfolio) have suffered losses of R1.6 billion. LD— EWN Reporter (@ewnreporter) August 15, 2018
SA Express is expected to take to the sky next week, but it’s still struggling to pay for parts and staff salaries.
Arms manufacturer Denel is also cash-strapped and is expected to report a loss in this financial year.
Gordhan says the state has limited resources to invest in SOCs, and the concept of a bailout must be completely removed from the language of parastatals.
#SOEs Eradicating corruption is difficult - those involved are doing political mobilising, "finding new friends" and creating new narratives to avoid being held accountable. LD— EWN Reporter (@ewnreporter) August 15, 2018
(Edited by Thapelo Lekabe)