SA’s ‘last chance’
CRITICAL COMPANIES: TRANSNET, SAA, ACSA, ESKOM TOP EXPERTS’ LISTS
Parastatals are job creators and provide critical services for the country, says economist.
Eskom and state-owned enterprises (SOEs) in the transport sector top experts’ lists of SOEs that government needs to prioritise. This emerged as Minister of Finance Tito Mboweni was expected to tread a fine line between fiscal prudence and reviving the economy in the budget today.
Economist Peter Baur said it was more important than ever for government to drive investment into SOEs to deal with the current job crunch and stimulate a healthier economy.
“We need to save Transnet because without a proper functioning railway, which is a job creator of note, and immediately after that must be the Airports Company of South Africa (Acsa) and SAA. And we need to invest in technology, which is why Denel is also so important,” said Baur.
“People say Denel is not that bad, but the thing is Denel is generating a lot of capital and it invests heavily in technology, and we have to focus on investment into technology as well.
“That money will always filter back into the economy somehow. Money has to be invested into state-owned enterprises, they are job creators, they provide critical services for the country.
“You don’t want to privatise electricity and find that suddenly the electricity bills are so high nobody can afford them.”
For political economist Zamikhaya Maseti, Transnet, SAA and Eskom topped his list of SOEs in desperate need of saving. “People make the mistake of thinking that privatising state entities will fix everything. But when you look at examples, like when they privatised the railway in Britain, where there was no improvement in the transport system and many now regret that decision.
“People tend to make the mistake of thinking that the markets will always do what is right for people, better than the public sector, and it is not correct. That is why government has to save Eskom and SAA and the others.”
According to the auditorgeneral’s 2018-2019 report on SOEs’ financial health, the following were the most poorly managed financially:
Transnet – R49 922 million irregular expenditure;
Eskom –R6 618 million irregular expenditure;
The SABC – R351 million in irregular expenditure;
Airports Company of SA – R264 million in irregular expenditure;
Denel – R217 million in irregular expenditure