Gordhan: 'Culture of integrity' needed to turn around SOEs - report

2018-10-28 14:45
Public Enterprises Minister Pravin Gordhan.

Public Enterprises Minister Pravin Gordhan.

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The country has been provided with a "window of opportunity" to change its trajectory, but to do this, it will require a sense of urgency and a "narrative based on a culture of integrity", public enterprises minister Pravin Gordhan says.

Writing for the Sunday Times, Gordhan said interventions to save state-owned enterprises (SOEs) must go further than simply replacing boards: he said structural challenges must also be addressed.

"Over the past seven months, we have been piecing together the story of how our SOCs were repurposed to benefit a few, with repercussions for the rest of the country which has suffered financially and lost faith in the integrity of those governing the country. There were many political office-bearers, civil servants and other professionals who were either direct beneficiaries, or simply turned a blind eye.

"We have learnt that just changing compromised boards will not be enough to restore SOEs. Interventions must go further to rid institutions of complicit managers," he wrote.

Since his appointment by President Cyril Ramaphosa in February, Gordhan has overhauled the boards of several SOEs, where allegations of corruption and maladministration have been rife.

He appointed new leadership at Eskom and made changes to the Transnet board. He also appointed an interim board at Denel. SOEs have widely been considered to be the sites of state capture. Gordhan previously estimated that the country may have lost more than R100bn to state capture.

In the Sunday Times, Gordhan said cash injections will not solve the problem. Patronage networks must also be unraveled, he warned.

"Dismantling the destructive business-state patronage networks that have embedded themselves across public enterprises - and indeed across all spheres of government - will require time, difficult choices and bold action by leaders.

"We need to consider: what are the objectives of SOEs? How do we fix their governance? How do we create fiscal sustainability? How do we strengthen the role of the state as a shareholder? How do we professionalise the boards and management? How do we ensure transparency and accountability? Are our SOEs fit for the future?

"Right now, we have a window of opportunity to change the country's trajectory, but this requires the voice of the citizenry, it requires a sense of urgency and it requires a new narrative centred on a culture of integrity," Gordhan said.

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