Riyaz Patel
The Democratic Alliance (DA) has called for the partial privatization of state-owned arms manufacturer Denel, following government’s R1.8 billion cash injection Friday.
The cash strapped arms entity had been struggling to pay salaries and said the bailout would help while it came up with a long-term survival strategy.
Denel was seeking a R2.8 billion bailout from government.
“An incredulous amount of the people’s money have been spent on SOEs and yet the public is getting very little in return,” said DA’s spokesperson on public enterprises Natasha Mazzone Saturday.
She added that throwing money at the entity would not fix its systemic challenges.
“It is no longer rational or feasible for government to have full ownership of Denel and it should be partially privatised. There are many defense companies in the world that would be interested in buying off shares and government should explore these possibilities.”
“By privatising this entity, we will reduce the impact of government guarantees on the fiscus, promote competitiveness, improve efficiency and stimulate job creation.”
Mazzone said bailouts provided temporary relief to Denel, but caused permanent damage to the national fiscus.
