Gordhan tables bill to create a holding company for SOEs
The National State Enterprises Bill aims to limit the interference by politicians in the SOEs such as Eskom and Transnet.
Minister of Public Enterprises Pravin Gordhan has tabled a bill to establish a holding company to house strategic State-Owned Entities.
The National State Enterprises Bill, which aims to ensure that subsidiary companies of SOEs are insulated from political interference, is expected to be tabled before the National Assembly’s portfolio committee on public enterprises, where it will be processed.
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NATIONAL TREASURY POURED BILLIONS INTO FAILING SOES
The National Treasury has poured billions of Rand to bail out several SOEs, including Eskom and Transnet, to improve their operational and financial performance.
“It is accepted that during the past decade, the performance of South African commercial State-Owned Companies (SOCs) has mostly been suboptimal. Key weaknesses of the system have been noted as being an excessive politicisation of board and senior management appointments in SOCs, weak coordination of national objectives and sectoral approaches, and a deficit of the required professional skills and sound corporate governance approaches,” states the bill.
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STATE MUST FORMALISE ITS ROLE AS A SHAREHOLDER
It further states that there’s been an agreement that the state must formalise its role as a shareholder in these entities. However, there must be limits to the interference by politicians in the SOEs.
“The bill provides for the establishment of a State-owned holding company, SAMSOC, to advance the country’s socio-economic objectives to preserve and grow the long-term value of national assets for the benefit of all citizens and future generations and thereby increase the value of investments in selected state-owned companies.”
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The cabinet approved the National State Enterprises Bill last December. Gordhan tabled it in Parliament on Thursday.