State will not sell its companies —Brown
The six state-owned companies that fell under the Department of Public Enterprises were not up for sale and private participation in state-owned companies would have to be signed off by the Cabinet, Public Enterprises Minister Lynne Brown said shortly before Christmas.
Brown’s statement, which was couched as an end-of-year statement, reiterated that privatisation was not government policy.
It follows the adoption of a new policy stance with regard to state-owned companies by the Cabinet in November.
“Neither I, as government’s sole shareholder — or our government — will bow to pressure or external lobbying to privatise any state-owned enterprises responsible for delivering basic services to the poor. Especially when it is not government policy. Eskom is not for sale. Koeberg is not for sale. And nor are Transnet, Denel or the other companies in the public enterprises portfolio.”
Any policy changes, such as proposals for new board appointments, private sector participation in state-owned companies and remuneration standards for executives, “must be completed and signed off by Cabinet”, she said.
However, all the issues mentioned by Brown as requiring further discussion were agreed on at the beginning of November when the Cabinet endorsed the
ALL THE ISSUES MENTIONED BY BROWN AS REQUIRING FURTHER DISCUSSION WERE AGREED ON IN NOVEMBER
new policy on state-owned enterprises, in part to stave off a downgrade by credit ratings agencies, which was successful.
In a statement at the beginning of November, the Cabinet said that it had agreed: a private sector participation framework for infrastructure delivery; guidelines for the remuneration and incentive standards for directors; a guide for the appointment of boards and executive officers; and a new government shareholder policy.
Details were not provided at the time.
But in an interview in December, director-general of the Treasury Lungisa Fuzile said that the new framework was intended to remove the “tentativeness” so that parastatals would not hesitate to enter into partnerships with the private sector
“If government is targeting to lift investment as a percentage of GDP, it makes sense to think about investment differently from investing on the back of state-owned entities’ balance sheets, so that the pace of investment does not depend on the balance sheets of these entities,” Fuzile said.