Gordhan announces new shareholder model for SOEs as Eskom reduces debt by millions

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Public Enterprises Minister Pravin Gordhan.
Public Enterprises Minister Pravin Gordhan.
Photo by Esa Alexander/Getty Images
  • Public Enterprises Minister Pravin Gordhan has announced a new shareholder model for state-owned companies.
  • A holding company for commercial entities is expected to be be set up.
  • Gordhan said there had been a dramatic improvement in Eskom’s performance.

Public Enterprises Minister Pravin Gordhan on Friday announced a shake-up of state-owned companies (SOEs) that will set them on a stronger commercial footing by creating a "centralised shareholder model" under a state-owned holding company. 

The holding company will embrace government’s commercial entities that engage in business activities, such as Eskom and Transnet. The Presidential State-owned Enterprise Council has recommended the proposed model. 

Said Gordhan:

"This [will] separate the state’s ownership functions from its policy and regulatory functions, minimise the scope for political interference, introduce greater professionalism, and manage state assets in a way that protects shareholder value."
 

Gordhan said much progress had already been made and that a Shareholder Bill would be introduced after approval by Cabinet. The necessary documents to establish the holding company had been drawn up and "the necessary consultation would soon be concluded," he said. 

READ | Ramaphosa announces council to reform SA's state-owned enterprises

Work had also been done on the consolidation of state-owned companies, of which there are more than 700, he said, and to assist those that found themselves in crisis.  

Responding to criticism that he had subverted processes in the selection and negotiation of a partner for SAA, Gordhan said he wanted to assure the public that "there has been absolute transparency and all necessary legal processes were complied with, notwithstanding the regrettable efforts by many to sabotage and undermine the process".

The National Treasury has made clear that it was not consulted in the choice of SAA’s strategic partner. 

Gordhan was speaking in a mini-plenary of the National Assembly where he tabled his budget vote to outline the strategic and spending priorities of his department. Most of his speech was dedicated to Eskom and Transnet, where efforts are under way to recover lost capacity. 

In a preview of Eskom’s financial results for the year ended March 2022, Gordhan said there had been a dramatic improvement in Eskom’s performance with an 85% improvement in earnings before interest, tax and depreciation (ebitda). Eskom has also successfully reduced debt to R396 billion, from a previous high of R440 billion. 

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