South African Minister of Public Enterprises Alec Erwin has been urged by the official opposition to break his silence on the government’s privatisation plans.
Democratic Alliance spokesperson on public enterprises Ian Davidson said: “Too many contradictory messages have been sent into the market place and investors are rightly feeling confused and uncertain.”
This follows speculation in a national newspaper that privatisation of key parastatals will be cut in its tracks and the state-owned enterprises — as the government prefers to call them — will be the engines of job-creating growth.
However, approached for comment, Erwin’s spokesperson Gaynor Kast said there will be no change in policy but the minister will be detailing his position before Parliament shortly.
Ministers are at present attending a lekgotla (meeting) to finetune policy positions and implementation strategies.
Davidson said the uncertainty about privatisation plans “are most acutely felt relating to two pivotal deals — Eskom and Transnet. If government backtracks on the privatisation of Eskom, it would create doubt over its commitment to black economic empowerment.”
He said “the next big deal on the horizon was the sale of a 10% stake in Eskom’s core power stations to a black empowerment consortium. The government continues to put pressure on business to transform and the least it could do is to ensure that this deal goes through, as a sign of good faith.
“Another casualty would be incoming investment. The international community, whose foreign direct investments in South Africa declined by 20% last year, considered the forthcoming privatisation of 30% of Eskom as a signal of the government’s commitment to openness and investment in South Africa.
“From this perspective it would also be irresponsible for government to backtrack on the deal.
“One of the best arguments for privatisation comes from the Department of Public Enterprises, in a policy document published by the ex-minister and now Transport Minister Jeff Radebe in August 2000.
“In that document the government also commits to the corporatisation, partial privatisation or restructuring of Eskom and various parts of Transnet including Spoornet, Petronet, Portnet, port operations, the Airports Company and SAA [South African Airways]. So far, glaringly few of these objectives have been achieved.
“The government seems to have hopes that public enterprises can be the engine of growth in South Africa. The folly of this approach is internationally accepted — experience shows that it is the private sector that most effectively drives growth and employment. There is no use in repeating that failed apartheid experiment by attempting to turn the parastatals into employment agencies.” — I-Net Bridge