Minister Gordhan thinks SOE bill will help struggling SOEs

In a bid to rejuvenate struggling State-Owned Entities (SOEs), Minister of Public Enterprises Pravin Gordhan champions the recently approved State Enterprises Bill. 

This legislative milestone, currently awaiting parliamentary processing, aims to fortify the operations of SOEs, such as Transnet, Denel, and Eskom, which have grappled with financial and operational woes impacting the nation’s economy.

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WHAT DOES THE BILL ENTAIL?

According to IOL, the proposed bill advocates for the creation of a state-owned holding company, a strategic move envisioned to bolster the resilience of identified SOEs.

Minister Gordhan emphasises a multifaceted approach to address the challenges faced by these entities, including reversing the adverse effects of past state capture incidents and implementing changes in board and management structures.

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President Cyril Ramaphosa, recognizing the urgency, visited key ports, the ports of Durban and Richards bay, last year, urging swift resolution to logistical backlogs.

Additionally, the government is addressing the declining rail network, a concern raised by unions foreseeing potential job cuts in the mining sector.

Minister Gordhan acknowledges the need for a paradigm shift, emphasising the importance of SOEs achieving financial sustainability without relying on government bailouts.

GORDHAN ON THE ROLE OF THE PRESIDENTIAL SOE COUNCIL

The Presidential SOE Council, established in 2020, plays a pivotal role in revitalising these entities by advocating a centralised model for improved oversight and management.

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“This also involves new initiatives by the President and Cabinet. The presidential SOE council is one such example. The presidential SOE Council recommended that the centralised model be adopted to oversee the SOEs with development of the National Enterprises Bill and formation of the State-Owned Holding Company.”

“On this basis, the department then developed the National State Enterprises Bill. The bill was published on September 15, 2023 for public comment, and the public comment period ended on October 14, 2023.”

“The bill incorporates the Presidential SOE Council’s recommendation to adopt a centralised shareholder model to improve the management and oversight of South African SOEs,” responded Gordhan to a written parliamentary question from IFP MP Inkosi Mzamo Buthelezi in the report by IOL.

In another response detailed by IOL to parliamentary inquiries, Minister Gordhan affirms the commitment to fighting corruption within SOEs.

As the nation awaits the parliamentary process, the proposed State Enterprises Bill represents a crucial step toward enhancing the efficiency and sustainability of South African SOEs.

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