Struggling state-owned South Africa companies

JOHANNESBURG: Heavily-indebted South African public companies are draining government coffers to stay afloat owing to years of bad management and corruption during the terms of former president Jacob Zuma. Cyril Ramaphosa, who has been president for almost two years, promised to clean up the companies but has in fact made little headway.

“State-owned entities require urgent attention,” Auditor-General Kimi Makwetu said in a report this week. He added that the financial situation of stateowned enterprises in general “remained under significant pressure.” Makwetu voiced “significant doubt about whether some of the SOEs can continue with their operations in future without financial assistance.” Following are major problem cases, and one relatively positive one.

Eskom provides around 95 percent of the electricity used in South Africa, mostly with coal-powered generating plants. They are old and poorly maintained however, and result in regular power shortages that hamper activity in Africa’s biggest economy. Eskom employs 46,000 people and has amassed 450 billion rand ($30 billion) in debt, even though the state has injected 128 billion rand into the company over a three-year period. Ramaphosa plans to split the group up into three separate units, production, transportation and distribution.

Interim chief executive Zuks Ramasia acknowledged recently that the airline’s accounts have been in the red for years, despite cash injections by the state. SAA last reported a profit in 2011, and has 9.2 billion rand in debt. In November, the carrier unveiled a restructuring plan that could eliminate almost 1,000 positions among its overall staff of nearly 5,200 people. Former head Dudu Myeni, who was close to Zuma, has been accused of “illegal practices” and company mismanagement by a commission probing corruption under the former president. —AFP