SOEs have work to do to boost the economy
FINANCE Minister Pravin Gordhan has called for improved financial performance of State-Owned Entities with a strong balance sheet.
But he said SAA would need a new capital injection.
Gordhan would not release details on the capital injection.
Director-general in the Treasury Lungisa Fuzile said this would be a substantial amount of money but they were still working out the details.
SAA has received billions of rand in guarantees in the past few years.
Gordhan said reforms were needed to fix the SOEs that have been in serious trouble.
He said he needed strong SOEs to boost the economy. “State-owned companies are governed by a strong legal framework, and the Cabinet has endorsed a series of measures to reinforce governance and accountability and clarify their development mandates,” he said.
“This imposes substantial obligations and responsibilities on boards and senior managers.”
Last week, Gordhan met top SAA officials to discuss its turnaround plan.
The Passenger Rail Agency of South Africa was in the third year of its rolling stock renewal programme.
In the Budget Review, the government wants SOEs to play a key role in growing the economy. SAA suffered a financial loss of R5.6 billion in 2014/15 and another loss of R1.5bn in the following financial year.
The airline is not out of trouble and the Treasury said it would continue to give financial support to the national carrier.
SAA has in the past 15 years received total bailouts of R19.1bn.
The government was also busy working on the merger of SAA with South African Express (SAX) and the introduction of an equity partner was still in progress.
President Jacob Zuma announced the merger of SAA with SAX in his State of the Nation address last year.
This was part of the plan to improve the balance sheet of the national carrier.
Prasa will receive more trains this year as part of its R53bn rolling stock fleet renewal programme. A total of 70 trains will be delivered this year.
Some of the trains have been delivered in the past two years, but a lot of questions have been raised around the quality of the trains.
The Prasa board has also gone to court to contest some of the contracts the previous executives of the agency entered into with some of the companies.
The value of the contracts is R14bn, and Prasa chairman Popo Molefe even told Parliament last year they were challenging the validity of these contracts.
The Budget Review said the South African Post Office (Sapo) was hoping to return to profit by 2017/18.
Sapo has been in serious trouble with losses in the past financial years.Last year it posted a loss of R1.14bn, down from a loss of R1.5bn in the previous financial year.
Sapo was working to stabilise its mail service and grow its logistics and parcel delivery business.
It also wants to expand Postbank.
These are the revenue-generating streams for the Post Office, and the competition in the market has affected its revenues.