The Citizen (Gauteng)

More woes for taxpayers

- Charles Cilliers

According to weekend reports, the financial woes at some of South Africa’s parastatal­s will once again see taxpayers coughing up to save them.

Government sources told the Sunday Times that the ANC’s cabinet lekgotla resolved last week to rescue the struggling entities, which are at risk of defaulting on their debts, or even collapsing as going concerns.

The SA National Roads Agency (Sanral) is reportedly due to get cash, as it can’t borrow any more; the SABC and SAA will get a government guarantee; while the SA Post Office will get money and guarantees.

Sanral has been particular­ly hard hit by road users boycotting the largely failed and massively unpopular e-tolls scheme, which even the ANC in Gauteng has turned its back on ahead of elections.

Commenting on the report yesterday, the DA’s shadow deputy minister of finance, MP Alf Lees, said the plan would simply worsen the country’s “precarious debt levels and negatively impact South Africa’s national sovereign ratings”.

“Cabinet’s argument that a Sanral default will affect sovereign ratings is flawed because a government guarantee of R59 billion will increase the state’s debt liabilitie­s to 60% of GDP, which is sure to induce a sovereign credit downgrade.

“It is somewhat surprising that the report seems to ignore the other elephant in the room – the contingent liability in the form of Eskom debt and government guarantees that, according to the Eskom corporate plan, will increase from R235 billion to R600 billion over the next three years.”

Lees said he would write to the chairperso­n of the standing committee on finance (Scof) Yunus Carrim to request that the fiscal liability committee and the asset and liability management unit of National Treasury be called urgently to address the Scof on the full extent of sovereign liabilitie­s, contingent liabilitie­s and current applicatio­ns for government guarantees and cash bailouts.

Communicat­ions Minister Nomvula Mokonyane, speaking in her capacity as spokespers­on for cabinet, reportedly said it was premature to comment on discussion­s about the rescue package before it was formally discussed in a cabinet meeting.

Sanral confirmed they had made a plea to government for financial assistance.

Cabinet’s argument that a Sanral default will affect sovereign ratings is flawed.

Alf Lees DAs shadow deputy minister of finance

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