Parliament wants struggling SOEs to explain continuous pleas for bailouts
National Treasury told MPs that the SABC had asked for R4.9 billion in financial support, the Post Office (Sapo) needed R1.5 billion, and the Airports Company of South Africa (Acsa) wanted a three-year loan guarantee of R3.5 billion.
CAPE TOWN - State-owned entities (SOEs) that are failing to implement turnaround plans are set to face questions in Parliament.
The Standing Committee on Appropriations on Tuesday said that it wanted several SOES to appear before it and explain the issues that impeded their viability and led to continuous pleas for bailouts.
National Treasury told the committee that the SABC had asked for R4.9 billion in financial support, the Post Office (Sapo) needed R1.5 billion, and the Airports Company of South Africa (Acsa) wanted a three-year loan guarantee of R3.5 billion.
Treasury’s Ravesh Rajlal said that state arms manufacturer Denel faced the risk of business rescue or liquidation due to its poor financial position, now made worse by the COVID-19 lockdown.
Rajlal also said that the struggling Post Office could be put under administration. Sapo has failed to implement various turnaround plans and is expected to post a net loss of R2.1 billion this year.
“If one looks at SAA and various other [state-owned] companies, there were turnaround plans that were drafted by different management teams and there were funds provided. But the unfortunate issue here is that most of these plans for these entities were not implemented,” Rajlal said.
Rajlal said that since 2001, a total of R187 billion was paid out to recapitalise state-owned entities.
Committee chairperson Sfiso Buthelezi said that SOEs would be asked to explain.
“There’s nothing as depressing as being told that the undertakings of SOEs are never followed up, especially around turnaround plans. We get all these questions - is there a deliberate sabotage strategy? I would rather have a situation where the plan was implemented and failed – but failure to implement the plan is gross dereliction of duty, to say the least,” he said.