Fin24

Gigaba: Transnet, Eskom won't be sold

2011-09-06 16:45

Pretoria - South Africa has no plans to privatise logistics group Transnet and power utility Eskom to attract more investment and has no intention of splitting the companies, the minister of public enterprises said on Tuesday.
 
Malusi Gigaba told Reuters in an interview that infrastructure development was the responsibility of the state and would remain in government hands, but he expects the private sector to play a bigger role.

“There is no anticipated privatisation of any of the entities or even a breakup of these entities,” he said.
 
Private investors have repeatedly said they could help relieve Eskom and Transnet’s strained balance sheet and speed up much-needed development in power plants and rail lines which transport commodities such as coal, iron ore and manganese.
 
So far investors have been limited by regulatory hurdles, but Gigaba said his ministry was developing a framework for how they should be involved in the sector, although he said South Africa would proceed carefully.
 
“On the continent private sector participation has been dismal... we have to be cautious in moving forward,” he said.

Gigaba said state firms were on track to meet borrowing targets spelt out in the February budget, and that Transnet plans to borrow from the international market later this year.
 
He said electricity tariff increases by Eskom were unavoidable, despite concerns from some big industrial users that they are hurting their viability and harming the economy.
 
Eskom was granted three annual increases of 25% and the national energy regulator has said Eskom may apply for two additional such hikes to pay for new power plants. From 2016, tariffs are expected to rise in line with inflation.

Inflation stood at 5.3% in July.
 
“We would like going forward to see Eskom’s tariffs being raised at inflation-related rates. Eskom has made the commitment and we will ensure that it sticks to it,” Gigaba said.
 
Gigaba said he had confidence in the new leadership at both entities and said Eskom would meet fast-rising demand for power and avoid a repeat of a supply crisis which hit the economy in early 2008.

“We will keep the lights on, there is no doubt about it,” he said.

Comments
  • clark - 2011-09-06 17:10

    - Well sure they wont be sold - who would ever buy them ?

      Tolerant - 2011-09-07 10:13

      Maybe Whitey B can spend another R1? This he spent some years ago on buying OK Bazaars. He could make these companies profitable again.

  • letsee - 2011-09-06 17:30

    Well, they are not in any good shape to be sold for good money but... they are likely to get worst. Why postpone?

  • Man can do - 2011-09-06 17:41

    Inflation stood at 5.3% in July. “We would like going forward to see Eskom’s tariffs being raised at inflation-related rates. Eskom has made the commitment and we will ensure that it sticks to it,” Gigaba said. And that relates to the 25% plus increases over the next how many years?

  • Charles N - 2011-09-06 17:44

    Why would they sell when the ANC has indirect investment into the receiving end of the money that gets dolled out from these parastatals? (Parastatal, Parasite, Co-incidence) Only once they have sucked them dry, and negotiated long-term deals with new purchasers would they even consider selling. And that's only IF the masses decide to wake up and ask the right questions!!!

  • Christopher - 2011-09-06 17:56

    A great pity as selling them would mean a HUGE saving for the SA taxpayer, the delivery of a better, more efficient service to the SA consumer, and the end of the superior salaries, bonuses, perks and golden handshakes paid to the stream of incompetent idiots who have been 'deployed' to try and run these organisations. Aluta Coninua!

  • jim.binnie - 2011-09-06 18:09

    Maybe the Minister should re-visit hi department's 2011 - 2014 strategic plan which is published on the www.dpe.gov.za website, SPECIFICALLY the section concerning the privatisation of Ngqura container terminal by 2014

  • Nasdaq7 - 2011-09-06 20:10

    Ridiculous. The country is missing investment. Oh how much longer must the un-educated revolutionaries lead the country?

      Nasdaq7 - 2011-09-06 23:38

      uneducated

  • Chibuli - 2011-09-06 22:00

    If Transnet was privatised we would witness the reinstatement of the rail services which have become defunct under the ANC regime. For instance, the line between Modimolle and Vaalwater could be recommissioned, and extended to Lephalale - and reduce the heavy trucks which tear up this road, and kill people, without fear of reprisal.

  • Mikaeel - 2011-09-06 22:45

    If they do that, it will become more difficult for the cadres to get top jobs

  • Sisie - 2011-09-07 07:36

    Of course they won't privatize these public enterprises, they are creaming it and you never kill the goose that lays the golden egg.

  • Johann - 2011-09-07 09:37

    Can someone please explain to me how come our electricity went up 48% per unit in July, when they supposedly only increase at 25% annually?

  • jojo - 2011-09-07 09:40

    Can someone please explain to me how come our electricity went up 48% per unit in July, when they supposedly only increase at 25% annually?

  • Foxie911 - 2011-09-07 10:01

    Of course they won't be sold - how else would the CEO's manage without their fatcat salaries and annual bonuses amounting to millions? meanwhile we "Sporie" pensioners are STILL waiting to hear whether we will be receiving our 5-months' payback bonus that SHOULD have been paid to us last year in August already (it was PROMISED!!) and our pensions reviewed as the 80 000 railway pensioners are ekeing out a mere existence on the smell of a rag - some receiving a mere R800 - R1000 per month and others not much more... All we old "Spories," who worked 40+ years to develop the OLD rail system to the backbone of our economy and keep the wheels rolling are sucking on the hind tit, while those who are now ru(in)ning the system never did a day's work in their lives but became millionaires overnight... Please, spoornet/transnet, keep us pensioners in the loop...

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