JEREMY LOVELL AND OWN CORRESPONDENT, Cape Town | Friday
SOUTH Africa will not be stampeded into selling off its state-owned firms, which together account for 14% of gross domestic product, and will try to get the best prices for telecommunications utility Telkom, power utility Eskom, transport utility Transnet and arms maker Denel while trying to ensure there were no wholesale job losses.
”We have no intention of embarking on a fire sale of state-owned assets,” said Public Enterprises Director General Sivi Gounden. ”It is always going to be a balancing act.”
Gounden said some firms would simply be liquidated because it was not possible to make them profitable while others would be wholly or partly privatised. But the government would not sell its economic crown jewels at a discount or be rushed into disposing of them before they were in a fit state to be sold.
Public Enterprise Minister Jeff Radebe published last month a policy framework entitled, ”An accelerated agenda towards the restructuring of state owned enterprises”.
In it the government commits itself to stepping up the pace of privatisation while at the same time maximising the returns and minimising the impact on jobs in a country where more than one-third of the workforce is without jobs.
It has already said it will float 20% of telecommunications utility Telkom, and Gounden said his team was studying the idea of loyalty bonuses for shareholders to encourage them to hold onto the shares.
Eskom, one of the most efficient power generators in the world, was also in the process of restructuring and would be opened to competition domestically while being encouraged to spread beyond South Africa’s borders to compete globally.
Denel had major potential to develop into high-tech civilian sectors, Gounden said, adding that Radebe would make an announcement on the choice of strategic private sector partners for the firm within the next four weeks.
Transnet was now also ready to face the future with confidence after parliament approved measures to eradicate a massive hole in its pension fund that had been costing it R1.4bn a year in debt service.
”There is no earthly reason why Transnet should ever post a loss again,” Gounden said. – Reuters