SOEs told they'd be privatised, so didn't invest in new infrastructure - Gigaba
Former Public Enterprises Minister Malusi Gigaba said that Eskom believed that a new competitor would be introduced.
JOHANNESBURG - Former Public Enterprises Minister Malusi Gigaba said that SOEs, including Transnet and Eskom, did not invest in new infrastructure because they were told that they would be privatised post-1994.
Gigaba continued to testify at the state capture commission on Monday.
Deputy Chief Justice Raymond Zondo asked him how Public Enterprise's ministers reported on the state of SOEs and if there was a way to see when they were in trouble, as many were.
Gigaba said that of the more than 700 state-owned entities, the minister was only directly responsible for eight.
He said that state-owned entities reported to different departments and levels of government – some to national, others to provinces.
He said that this meant that the Public Enterprises minister was not required to report on their performance unless, for example, Treasury was required to bail them out.
But even worse, many believed they would not exist post-1994.
"When 1994 happened most of our SOEs were told they would be privatised, including Transnet, and for long period it didn’t invest in new rail capacity because they were told they would be privatised and therefore their finances began to dwindle," Gigaba explained.
He said that Eskom believed that a new competitor would be introduced.
"As a result, when 2008 happened, we found ourselves experiencing load shedding and began at that period to commission new power stations, the contracts of which were entered into in a rush."
Gigaba said that he hoped the SOEs council that was appointed by President Cyril Ramaphosa a year ago would address the loopholes in accountability.