State firms face external audit

Johannesburg - President Jacob Zuma has ordered an external audit of state companies, following persistent reports of mismanagement and political meddling, and said he wants faster action to curb corruption.

In an interview with the Sunday Times newspaper, Zuma said he had commissioned a private company to review the operations of all state-owned enterprises (SOEs) and provide solutions to their problems.

"I have taken a decision which is going to solve SOE problems for ever: I have ordered a review of all of them with a final decision on what to do. It is being done by outside people who have no interest," the paper quoted Zuma as saying.

"It is being done on behalf of the country and we'll be advised about what to do. It is clear there are difficulties... A review is going to come up with something that's going to solve the problem for ever."

Zuma pointed to state airline South African Airways (SAA) and power utility Eskom, which he said had always had problems.

A leadership crisis at Eskom last year resulted in both the chief executive and the board chairman leaving the firm after clashing over how to run the utility, which is struggling to keep South Africa's lights on.

Key roles at SAA and logistics group Transnet have also been left unfilled as the companies struggle to resolve internal battles.

Analysts have said that political meddling in efforts to resolve the companies' problems has raised questions about South Africa's ability to run state-owned firms, making investors hesitate to commit new funds and raising the cost of loans.

Both Transnet and Eskom are struggling to raise the funds they need to pay for large expansion programmes to meet fast-rising demand, the more so since the recession led to tighter conditions on credit markets.

Zuma also said his government needed to deal more urgently with corruption. "My complaint is that problems of corruption take too long to be finalised... We need a shorter way of dealing with such issues," he said.

- Reuters