Many more state-owned enterprises are in the public protector’s crosshairs

At least eight state-owned enterprises, and the provincially subsidised Gautrain, are in for trouble from the next public protector – if only she can figure out how to operate with too little money.

The state-owned enterprises, especially Eskom and SAA, have come in for much criticism recently from the treasury and, in the past financial year, the public protector has also made adverse findings on the SABC, the Post Office and the Passenger Rail Agency (Prasa).

Unless a new public protector charts a radically different course after Thuli Madonsela’s term ends on October 15, many more will join that list. She said in an annual report tabled in Parliament last week, and which has gone almost unnoticed, that her office is still working on several investigations into state-owned enterprise, and “showing worrying signs regarding improper appointments, handling of whistle-blowers and tender irregularities, including corruption, are Prasa phase two, SABC, Eskom, Sassa [the South African Social Security Agency], Transnet and Gautrain, among others”.

Elsewhere in her report she says “less extensive allegations are being followed up” relating to Telkom, PetroSA and the South African National Roads Agency (Sanral).

Gautrain this week insisted its inclusion in the list of investigations must have been “some kind of mistake” because it was convinced it was not facing an investigation.

“We haven’t had any information requested for the past three years,” said Gautrain CEO Jack van der Merwe. The organisation would discuss the matter with the protector’s office, he said.

The public protector’s office subsequently confirmed that a Gautrain investigation was underway.

General problems found “include corporate governance at the level of boards, improper appointment, promotion, remuneration and dismissal of employees, including undue golden handshakes and procurement irregularities, including corrupt award of contracts and payments against such contracts, as well as unmanaged time and cost overruns for infrastructure projects”.

But the trouble does not just flow one way. The protector has 18 cases under review at the high court, according to the report, and there is a real fear that the number will grow.

“The main challenge and risk the institution faces is an increasing number of state institutions taking the public protector’s reports on judicial review,” she said in the report in a section on future risks. “As a result, the public protector is forced to defend these matters, resulting in a massive financial burden to the institution.”

The landmark Constitutional Court judgment on President Jacob Zuma’s Nkandla home, which held the protector’s remedial action to be binding, meant more such challenges could arise and it could receive more complaints that would need investigating, it said.

The office still lacks a proper case management system to deal with such an influx, although it has secured a $500 000 grant for that purpose from the United States Agency for International Development.

In the past financial year, the protector had a R246-million budget to handle 17 374 cases and spent on average less than R20 000 for each case finalised.

The office faces “unbelievable resource constraints”, Madonsela said, repeating the phrase twice.


This article has been updated on September 15 to include a denial by the Gautrain that it faces investigation, and a confirmation by the public protector that it does, after the Gautrain contacted the Mail & Guardian to suggest the statement must have been in error.

Phillip De Wet
Guest Author
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