Johnathan Paoli
Minister in the Presidency Khumbudzo Ntshavheni has confirmed on Wednesday that cabinet has given the go-ahead for the legislative process to begin on the National State Enterprises Bill.
The bill, which is expected to establish a state asset management company under which state-owned companies will operate, follows similar models in Malaysia and Singapore, and would do away with the Department of Public Enterprises.
Ntshavheni said the bill would also seek to remove the prerogative of ministers to appoint boards for SOEs, in order to ensure stability and spontaneous dismissals.
“You need people who are objective so that they can put boards that are effective, that are skilled, that are not beholden not only to a minister or the administrators in a particular department,” Ntshavheni said.
The minister said that it remained unconfirmed which of the SOEs are expected to be the first to be placed under the oversight of the new company; but the move would not change the need for the SOEs to report to the respective government departments according to their portfolios, in order to ensure policy directives were being followed.
Public Enterprises Minister Pravin Gordhan has previously said the model would have the advantage of separating the state’s ownership functions from its policy and regulatory functions, minimising the scope for political interference, and introducing greater professionalism into the entities.
DA MP Ghaleb Cachalia previously said that while the bill seeks to enable private equity investment in strategic SOEs and the party welcoming such development that aligns with long-standing DA policies, the bill’s provision for a new shareholding company to oversee the dysfunctional SOEs is counterproductive and rendered it undesirable.
Business Leadership SA CEO Busisiwe Mavuso said that the company would have the power to turn around the nation’s struggling SOEs and would allow the government to focus on policy and regulatory issues; but that financial and other elements of autonomy were required in order to prevent corruption.
“It needs a board of accomplished, experienced professionals with extensive corporate expertise and not political cronies. In turn, it must have authority over the boards it appoints to manage the SOEs and to monitor performance and ensure delivery,” Mavuso said.
The bill has been published in the government gazette in order to encourage and engage public comment.
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