Parastatals could take months to recover from corruption – Gordhan

Pravin Gordhan. Picture: Yunus Mohamed/Photo24
Pravin Gordhan. Picture: Yunus Mohamed/Photo24

State-owned enterprises could take months to recover from corruption Public Enterprise Minister Pravin Gordhan says, and it could take six months or longer depending on the extent of corruption.

Gordhan was on Wednesday briefing the portfolio committee on public enterprises on the progress made in addressing governance at state-owned enterprises.

Gordhan primarily addressed corruption at these institutions and revealed how much the entities had lost in revenues.

The overall revenue generated by the six entities (Eskom, Denel, Transnet, SA Express, SA forestry company and Alexkor) amounted to R284 billion, with assets valued at R1.1 trillion, despite cash-strapped arms manufacturer Denel expected to report a loss this financial year.

Collectively, the entities had made a R1.6 billion loss, which Gordhan said needed to change by the newly appointed boards at state-owned enterprises addressing the issues of the past, mainly corruption.

“In the five-month period the basic theme has been to deal with the past, survive the present and create a basis for sustainability for the future. We have the challenges of the past to deal with [and] cleaning up the past won’t be easy.

“Corruption is not just about stealing a few rands. It has a devastating impact on institution. Corruption means less housing, less money for education and facilities many people don’t have, especially given the fiscal constraints we face,” he said.

He added that he had faith in the judicial commission of inquiry into state capture and believes that consequences would follow.

Speaking on SA Express, Gordhan said that grounded planes would be ready to take off next week.

The airline was grounded on May 24 after the South African Civil Aviation Authority suspended the entity’s Air Operator Certificate. SA Express is now in a “happy situation”, Gordhan said, after the airline was cleared through internal processes.

He added that there were also plans to initiate two routes next week and possibly add more routes on a weekly basis.

Gordhan said that the state needed to better manage the aviation entities Mango, SAA and SA Express, as they all experienced “high levels” of corruption.

“Dubious contracts [were] being signed in terms of fuel, baggage and acquisition of parts. Officials both in SA Express and in the private sector were involved. There’s also a pattern of irregular and wasteful expenditure,” the minister said.

Gordhan said that the inefficient running of state-owned enterprises was negatively impacting the economy. Although Eskom had managed to secure $1.5 billion (about R21.96 billion) in foreign investment, Gordhan said that state-owned enterprises could not continue borrowing their way out of debt.

“The state has limited resources to invest in [state-owned enterprises]... the concept of a bailout must be removed from the language of parastatals,” he said.


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