Non-core SOE as­sets set to be sold

The Star Early Edition - - NEWS - Siyabonga Mkhwanazi

THE GOV­ERN­MENT has com­mit­ted it­self that it will fi­nalise plans to sell non-core as­sets in state-owned en­ti­ties (SOEs) by early next year in or­der to raise cap­i­tal and dis­pose of them.

How­ever, it has not said what as­sets would be sold, ex­cept to say it was busy with the process.

Fi­nance Min­is­ter Malusi Gi­gaba said re­cently that they were busy iden­ti­fy­ing non-core as­sets they would sell to the pri­vate sec­tor.

Chief econ­o­mist at Ef­fi­cient Group Dawie Roodt said yes­ter­day that he was not op­ti­mistic about the process and whether the pri­vate sec­tor would buy these as­sets.

He said most of the as­sets in state en­ti­ties were non-core as­sets and the gov­ern­ment would try to sell worth­less as­sets.

“The big ques­tion is, will the pri­vate sec­tor buy the duds. The pri­vate sec­tor will buy the duds if they will make money,” he said.

Two years ago the gov­ern­ment sold its stake at Vo­da­com and got R23 bil­lion, which it gave to Eskom.

This was at the time the power util­ity needed the cash.

The gov­ern­ment also con­verted its R60bn loan to Eskom, tak­ing the fi­nan­cial in­jec­tion to the power to R83bn.

Gi­gaba told Par­lia­ment re­cently they were look­ing at selling some of the non-core as­sets to raise the R13bn the na­tional car­rier needs.

How­ever, Gi­gaba said this was not unique to SAA as they were look­ing at non-core as­sets for sale across SOEs.

He would not say which non­core as­sets had been iden­ti­fied or would be sold once the gov­ern­ment had agreed on the sale.

Gi­gaba said this process be­gan a while ago and would be com­pleted in March next year.

It is ex­pected that Gi­gaba in his bud­get speech in Fe­bru­ary next year will talk about some of the as­sets that will be con­sid­ered for sale and how much the gov­ern­ment was ex­pect­ing to raise from them.

SOEs have been shrouded in state cap­ture al­le­ga­tions and poor gov­er­nance.

The gov­ern­ment has been push­ing them to main­tain a strong bal­ance sheet and stop re­ly­ing on bailouts.

The state has given the SOEs guar­an­tees of more than R467bn in the last few years with SAA, Eskom and Transnet get­ting a por­tion of the loan guar­an­tees.

The is­sue of the guar­an­tees has also come into fo­cus in re­cent times with calls for the gov­ern­ment urged to stop giv­ing guar­an­tees be­cause of al­le­ga­tions of cor­rup­tion and poor gov­er­nance.

This week t ee on pub­lic en­ter­prises will be­gin its in­quiry into state cap­ture. How­ever, the wit­nesses are ex­pected to be called at the end of the month to give ev­i­dence into al­le­ga­tions of cor­rup­tion at Eskom.

PHOTO: SIMPHIWE MBOKAZI

The state’s stake in Vo­da­com raised R23 bil­lion when sold two years ago, which was given to Eskom.

PHOTO: REUTERS

Eskom’s logo at Koe­berg nu­clear power plant. Eskom has been a re­cip­i­ent of state fund guar­an­tees in the past.

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