'This is your last chance': Scopa chair’s message to Ramaphosa


Member of Parliament for the Inkatha Freedom Party and Standing Committee on Public Accounts chair Mkhuleko Hlengwa told Fin24 ahead of President Cyril Ramaphosa's State of the Nation Address that it was show-and-prove time for the president’s ambitions to save parastatals.

Among other things, Hlengwa believes it would be "reckless and irresponsible" to provide Eskom with financial assistance using government employees' pension funds, and argues SAA is "on its way out" and should eventually be privatised. 

Ramaphosa is expected to deliver the 2020 State of The Nation Address in a joint sitting at the National Assembly chamber on Thursday evening. The address comes at a time of intense scrutiny on matters including SOEs' financial woes, widespread retrenchments and lacklustre economic growth.

It also comes amid talks on a proposal by trade union federation Cosatu to turn around power utility Eskom using, among other interventions, a special purpose finance vehicle using funds sourced from state-run asset manager the Public Investment Corporation and other state institutions.

South African Airways, meanwhile, is in business rescue, with all but one of its domestic routes cancelled last week. 

'Rands, cents, people'

Hlengwa told Fin24 on Thursday morning that when Ramaphosa takes to the podium on Thursday evening, the president should articulate a plan to fix SOEs that fundamentally prioritises "Rands, cents and people".

"The fundamental issue is that the president needs to provide certainty of the highest order in terms of the policy direction that his government will be taking, particularly where the SOEs are concerned - Eskom and SAA in particular, and, of course, all the others in general," said Hlengwa.

Hlengwa said the occasion was a critical battlefield for the president to win over public perceptions, particularly ahead of Finance Minister Tito Mboweni's Budget Speech, to be tabled in Parliament later in February.

"The fiscus is strained. His interventions need to limit bailouts to the point of elimination. We need to set the SOEs on a trajectory of sustainability, profitability and viability. In the absence of that kind of viability, the president would have missed an opportunity to salvage these SOEs," Hlengwa said.

Hlengwa said law enforcement agencies were fundamental to the turnaround of SOEs in ensuring accountability and consequence management but said the National Prosecuting Authority has been a dismal failure, to say the least, in inspiring confidence.

"The optics go a long way in showing whether you are achieving what you would like. By the looks of things, the NPA has not turned the corner. The good will at the top has not trickled down to management and that is where state capture takes place," he said.

'Reckless and irresponsible decision'

On the proposal to use government employees' pension funds to assist Eskom financially, Hlengwa said government had for years been throwing financial solutions at problems in state-owned entities which were not necessarily financial.

"It would be a very reckless and irresponsible decision, in the absence of strategic, sustainable and viable reforms at Eskom. We have continuously thrown financial solutions to what are, in effect, not financial problems at Eskom and the other SOEs. 

"We need to ensure that Eskom is placed on a trajectory of change and transformation and then the money will be pumped into something much more definitive and not something speculative," Hlengwa said.

Cut losses, privatise SAA

Hlengwa said Scopa would be meeting with the SAA business rescue practitioners and Minister of Public Enterprises Pravin Gordhan for an update on the plans to save the national carrier. He believes the state should gradually unshackle itself from the loss-making airline.

"We as Scopa are meeting with SAA next week Wednesday. The business rescue practitioner and the minister will give us a way forward. The closure of routes and so forth are an indication of an airline that is on its way out.

"It would be prudent at this point, as it was five years ago or more when SAA started making losses, to bite the bullet and do the patriotic thing in the fiscal and national interest and introduce private partnerships with a view of privatising SAA completely," Hlengwa said.

Hlengwa said the country must cut its losses and discontinue the cycle of throwing money into the loss-making national carrier.

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