MINISTER OF PUBLIC ENTERPRISES: NO PRIVATISING

Transnet Limited falls under the Department of Public Enterprises. Brendan Boyle writes in the Johannesburg Sunday Times, 20 February 2011:
“In an interview this week, [newly appointed South African minister of public enterprises] Malusi Gigaba, 39, dispensed with the ritual of acknowledging the fine work done by his predecessors, Barbara Hogan and Alec Erwin, avoided any promise to build on the solid foundation he had inherited, and signalled a shift in the government’s attitude to the eight corporations it has assigned him to oversee.

“Describing himself as excessively reasonable, but impatient, he said he would be a ‘hands-on’ manager through the appointed boards of the corporations managed by his department.

The big three are Eskom, Transnet and South African Airways (SAA). His mandate includes the domestic airline SA Express, the forestry company Safcol, arms manufacturer Denel, mining company Alexkor and the internet facilities company Broadband Infraco.

“Asked if he had been having fun since President Jacob Zuma gave him the job with neither consultation nor any warning, he said: ‘Yes, I think so. To make the decisions, that’s fun.’ He said he was also ready to give orders and see they were obeyed.

He said his mission was to align the state-owned enterprises (SOEs) with the Zuma government’s priorities, and the first of those was job creation. ‘The SOE doesn’t exist for the sake of the bottom line. It exists to assist government to meet its developmental objectives. It has a broader social mandate,’ he said.

“Gigaba said that as soon as he was appointed he asked the executives of all eight entities to come up with plans to “stretch” their existing targets for employment, training and localisation of their procurements. Some, like Infraco, reported back that they could not create more jobs. Others, including Transnet and Eskom, came back with ‘big, bold plans, which they are already implementing’.



“He said he would also continue to insist that the poor should be shielded as much as possible, whereas those who are heavy users of SOE services should be prepared to continue to pay a high unit price.

“Gigaba said he believed the boards and management of the corporations all accepted that they must amend the Trevor Manuel-taught discipline of the bottom line and tweak their corporate strategies to support the government’s interventionist policy of using the share of the economy it owns to boost growth and employment.

“But he made no bones about the extent of his authority as representative of the single shareholder of each company: ‘I tell you what I want. I represent the shareholder.

We won’t be so unreasonable as to insist that something should be done when it will jeopardise the company’s balance sheet or integrity, but at the same time we won’t raise things which are petty, or have malicious intentions. We need to strike a balance. You need to come to a point where you realise the synergies between service delivery and the developmental objectives.”


Gigaba is “keen to plug the many holes in the SOEs’ management teams as soon as possible, and then to get on with the transformation of the entities. The presidential review commission on state-owned enterprises is due soon. Gigaba said it was not for him to pre-empt the recommendations, but thought there would be sweeping changes. He does not expect any change in the corporatisation of the big enterprises like Transnet and Eskom, and he rules out privatisation, which, he said,
wasn’t in the mind of the government at present or in future.”

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