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Many SOEs in distress, need monitoring - Brown

Dec 01 2015 21:30
Dane McDonald

Cape Town – Department of Public Enterprises (DPE) Minister Lynne Brown on Tuesday said many state-owned enterprises (SOEs) were in "distress" and needed close monitoring.

"It is clear that the current status quo cannot be maintained as it poses major risks," Brown said in a speech to the Johannesburg Chamber of Commerce and Industry.

Most SOEs were dependent upon guarantees to stay afloat, she said.

This year, several SOEs - including South African Airways, South African Post Office, Eskom, Prasa, and PetroSA - made headlines for unsustainable financial balance sheets.

As part of a programme to stabilise SOEs, Cabinet had instructed the DPE to develop a concept paper on the proposed Shareholder Management Bill for SOEs.

Brown also said there was a need to adopt "radical economic policies" to create tangible opportunities for the private sector.

"It is clear that the private sector has a significant role to play in the infrastructure roll-out partnering with the state-owned companies," she said.

Brown highlighted several opportunities in the transport and energy sectors.

Transnet’s capital expenditure stood at approximately R336bn and the development of assets like rail, transformers and locomotives, presented opportunities for private sector partnerships.

Brown said it was crucial that the private sector played a role in addressing the future power needs of South Africa.

"This will reduce the funding burden on government, relieve the borrowing requirements of Eskom and introduce generation technologies that Eskom may not consider as part of its core function," she said.

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transnet  |  eskom  |  lynne brown  |  sa economy

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