All eyes on Nene, Gordhan with SOEs
With about half of SA’s stateowned enterprises (SOEs) posting huge losses during the last financial year – R22 billion for the year to March 2017 – all eyes are on Finance Minister Nhlanhla Nene and Public Enterprises Minister Pravin Gordhan to save them from collapse.
Gordhan is responsible for Eskom, Denel, Alexkor, SA Express, Safcol and Transnet, all with financial and corporate governance problems.
SA Express warned of big losses which may plunge it into insolvency, saying its 2016/17 year loss would be about R234 million. .
But the biggest problem is Eskom, which had a R6.4 billion loss in the 2016/17 financial year. Its assets are R710 billion and its liabilities are over R534 billion. Its gross finance cost totalled R37.8 billion last year. The AG accused Eskom of nearly R3 billion in irregular expenses in the past year.
Transnet has management and governance issues, with over R700 million in irregular and wasteful expenditure in the last financial year. Assets (R351 billion) exceeded liabilities (R208 billion) at year end, but the shortterm component of the R13.8 billion debt means it might still be vulnerable. Fortunately, it showed a profit of nearly R2.8 billion last year.
SA Airways had liabilities of R27.7 billion exceeding assets by R11 billion at end of March 2016. Results for 2017 will be delayed, but the AG’s recent parliament report stated the loss for the year to March 2017 was R5.6 billion.
The latest results from the SA Post Office (Sapo) date from 2016 and show it’s insolvent, with liabilities exceeding assets by R144 million at the end of March 2016. Sapo had a R980 million loss.
The SABC is near bankruptcy after a huge loss of nearly R1 billion. The AG’s report has pages of problems.
Sanral had a nearly R5 billion loss in the year to March 2017 and the AG identified R440 million of irregular expenditure.