Struggling state-owned entities splash out on sponsorships
Business associations and related organisations have been living off embattled state-owned enterprises through sponsorships, service costs and membership fees, Public Enterprises Minister Lynne Brown admitted to Parliament.
In a written reply to questions, Brown said Transnet alone had made payments amounting to R4.6m to the Black Management Forum (BMF), the Black Business Council (BBC), Business Unity SA and the South African Chamber of Commerce and Industry.
The Department of Trade and Industry paid out R7m in sponsorship and fees. Overall, state departments forked out R14m to similar organisations via sponsorships.
The chamber of commerce and industry, the BMF and the BBC each receive at least R1m from government departments and entities for membership fees, events and sponsorship.
The majority of the stateowned entities are struggling with viability and have to ask the government for bailouts.
Brown said payments to the chamber of commerce and industry by Transnet over the last three years had included R1.9 m in sponsorships, which increased from R438,596 in 2014 to R541,228 in 2017. Transnet was the most generous of the state-owned enterprises under the Department of Public Enterprises over the last three years, according to department figures.
Transnet also paid more than R1m in sponsorships to the BMF between 2014 and 2016.
The BBC received R700,000 from Transnet in the same period for annual gala dinners and “stakeholder engagement”.
Transnet paid R22,800 to Business Unity SA for a gala dinner in 2014, the minister said in the reply.
In a statement, DA spokesman on finance David Maynier said he would ask auditor-general Kimi Makwetu to investigate the payments once the party had received information from all departments pertaining to their sponsorship payments.
“It boggles the mind that cash-strapped state-owned enterprises would be allowed to use public funds to sponsor private institutions, especially when some of these institutions blatantly pursue a political agenda and bite the hand that feeds them,” he said.
Denel paid R303,000 in membership fees to the chamber of commerce and industry.
In 2016, Eskom paid R74,563 to the Afrikaanse Handelsinstituut for a gala dinner and membership fees.
In the same year, Eskom also paid the chamber of commerce and industry R563,000.
According to Brown, R450,000 of this was for a gala dinner and the rest was for corporate member fees.
The BBC received R350,000 from Eskom for membership fees and sponsorships.