Parliament committee passes unresolved issues at SOEs to new administration

Parliament committee passes unresolved issues at SOEs to new administration

The Select Committee on Public Enterprises and Communication has passed the parcel of major unresolved issues at state-owned enterprises (SOEs) to the next body when Parliament rises after the May 29 elections.

Committee content advisor Eric Boskati yesterday listed the unprofitability of state-owned diamond mining company Alexkor, the collapse of the South African Airways (SAA) strategic equity partner process, Eskom’s battle to keep the lights on, with R250 billion of the R470bn in state guarantees.

Boskati also mentioned the non-start of the Post Bank as another issue, adding that since the Post Office was under business rescue, a new entity has to be formed to manage the bank.

The committee, which has met only 98 times in the five years of office due to Covid-19 disruptions, said it had been limited in its role to oversight of the Department of Public Enterprises (DPE), but not other mandated functions including public participation, intergovernmental relations and international agreements.

Key areas for the future committee include the implementation of the settlement between Alexkor and the DPE, South African Forestry Company’s (Safcol) need to address issues raised by successful claimants.

Other issues include the auctioning of spectrum by the Independent Communications Authority of South Africa (Icasa) meant to bring down the cost of data, attention to the ongoing investigations of state capture, the completion of the South Africa Connect project, as well as monitoring SAA and the Post Office.

Key challenges rolled over include the implementation of the National Enterprise Bill, which will help monitor all the SOEs and ensure reporting to Parliament after the House was sternly warned in the SAA/Takatso transaction to be mindful of the roles of the executive.

“The SOEs, according to the Zondo Commission report, constituted almost 90% of transactions made during the state capture report. Affected some severely, SA Express was liquidated, SAA was put under business rescue but collapsed. Eskom needed National Treasury to help with the R250bn advance,” Boskati read from the report.

“The Post Bank has not been operational. It had to meet all banking requirements, and still has to be corporatised to function effectively. The Reserve Bank directed Post Bank that It could not be under a struggling SOE, it needs a controlling company.

“South African Connect project which was to provide ICT capacity to schools, clinics, police stations, etc. Phase 1 was done but Phase 2. Sentech and Telkom were to be the service providers to do the connection.

“Safcol members who won in court to have their land titles. We heard for the first time that Safcol had declared a dividend of R1 million to the National Treasury which was unprecedented.”

The Committee also said the issues faced by SOEs were much more difficult for it to handle and it was apparent that SOEs were in deep trouble.

“A business rescue process (BRP) for SAA collapsed and the airline’s future remains uncertain. The Post Office is going through a similar role as BRP’s try to salvage it.

“As for Transnet, Denel, Eskom and others, law enforcement agencies are still busy with investigations, cancelling fraudulent contracts and trying to recover some of the money looted in state capture.”

The Committee said it could not undertake international study tours during its term of office.

Part of its recommendations were that The Presidency and the government should ensure that policy matters within departments were reached within the specified time, as a lot of outstanding matters were legacy issues inherited from the previous Parliament.

“New appointments of ministers and staff members. These new appointments do not have an understanding of the previous administration and the pace at which they did things and placed emphasis on some of these policies,” the committee noted.

The select committee adopted the report and adjourned.

BUSINESS REPORT