President Cyril Ramaphosa, in his weekly newsletter, reflected on what has been a tough week for state-owned enterprises (SOEs).

Ramaphosa addresses SAA business rescue

Last week, South African Airways (SAA) after a November that proved to be disastrous financially, filed for business rescue with CIPC. This, Cyril Ramaphosa explained, was the last ditch effort to resuscitate the airline.

“Business rescue is not the preferred option for fixing our state-owned enterprises, nor would it necessarily be advisable in other circumstances. But the resolve we have shown in putting SAA into business rescue cuts across all key SOEs. Whether it is Transnet or Eskom, Denel or Prasa, we are taking all necessary measures to turn them around,” he said.

Much of South Africa’s problems in governance, he continued, can be attributed to state capture. Subliminally, Ramaphosa chalked the blame for the state of things at state parastatals squarely on Jacob Zuma’s presidency.

The looting, the shortage of skilled staff and gross mismanagement have hindered progress and most SOEs, the president revealed, operate on outdated business models that are no longer fit for purpose.

“An immediate challenge was to end state capture and tackle the corruption that had crippled a number of our state owned companies. As the new leadership has undertaken this work, several individuals have been charged and, in some cases, stolen funds have been recovered.

“This work must necessarily continue until all corrupt activities have been uncovered and those responsible held to account before a court of law. Then financial systems must be strengthened and diligently observed so that no corruption is possible,” Ramaphosa added.

Medupi and Kusile: A distant dream at this time

A greater threat that has returned to haunt South Africa is Eskom. The power entity has, since Friday, 6 December, implemented rolling blackouts.

In a statement, Eksom explained that much of the entity’s current troubles are linked to the wet weather that has persisted over the interior of the country.

The rainfall has somehow drenched a good portion of Eskom’s coal reserves. This means that there has been reduced generation in most power stations, forcing the utility to institute stage 4 load shedding on Monday.

For Ramaphosa, all of these problems would be put behind him if Medupi and Kusile — two of South Africa’s mega power stations — were operating at maximum capacity.

“Once the work to correct the problems with its design and construction is complete, it is expected to contribute around 4,700 megawatts into the national grid, producing enough power in a year to meet the electricity needs of more than a million people,” he explained.

However, it will take a lot to address Medupi’s problems, which account “for much of the financial crisis at Eskom.”

Ramaphosa urged the public to see the decision taken on SAA as an indication of the government’s will to save SOE’s. He dd not say it in so many words but the president did hint at following a similar resolve with other failing state parastatals should it be the only other option left.

“As the SAA business rescue demonstrates, we will not hesitate to do what it takes to return our SOEs to financial and operational health,” he warned.


Presh JM Reporter

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