/ 3 February 2021

SOEs are ‘in a very difficult space’ as Covid-19 adds to their woes

Molefe says Transnet is reviewing the controversial contracts for 1064 locomotives
Inadequate rail capacity has pushed more trucks, and costs, onto municipal roads, which are steadily deteriorating. (Waldo Swiegers/Bloomberg/Getty Images)

The department of public enterprises briefed parliament on Wednesday about the effects Covid-19 had on state-owned enterprises (SOEs) during 2020. 

Acting public enterprises director general Kgathatso Tlhakudi briefly touched on issues related to the pandemic, as he briefed MPs on SOEs’ performance.  

The department has set aside a budget of R1-million to implement Covid-19 protocols, including sanitisation and deep cleaning, in its own building. However, only 30% of this budget has been spent to date. 

According to Tlhakudi, a departmental steering committee was established to advise and monitor daily compliance relating to Covid-19 protocols, and the department had experienced only two office closures since March 2020. 

Although Covid-19 affected some SOEs to a lesser extent than others, many of them faced challenges emanating from a battered economy and the lockdown restrictions in 2020.

This added to the burden of SOEs that had already been struggling because of state capture and alleged corruption. 

SOEs hit particularly hard by the coronavirus pandemic include Transnet, Eskom and SA Express

Tlhakudi told Parliament: “We are in a very difficult space as a result of Covid-19”.

Probably the hardest hit was the aviation sector. “For 2020, the [aviation] market dropped by 82%. In 2020, we had only 18% of the market we had in 2019,” Tlhakudi said. This is in addition to the dire state SAA and SA Express already found themselves in before the advent of the pandemic.

Moving on to the state’s rail, ports and pipelines agency, Tlhakadi said that the pandemic affected all of Transnet’s operating divisions, especially rail volumes, which make up 70% of the company’s revenue. 

“Rail volumes, which are a significant contributor to Transnet’s revenue, are projected to record lower volumes across all the main critical categories,” Tlhakadi said, adding that these volumes included general freight, as well as the transport of coal and iron. 

“The overall performance highlights the impact of initial lockdown and the fact that the global economic recovery is still sluggish. The second wave of the pandemic is likely to have an additional impact,” Tlhakudi said.

Tlhakudi also emphasised the effect Covid-19 fatalities had on the workforce, especially at Eskom and Transnet. 

Close to 30 000 employees underwent Covid-19 tests at the power utility. More than 3 200 employees tested positive, and 62 passed away. Transnet conducted 5 822 tests, of which 4 742 were positive, and 90 employees died. 

But Tlhakudi said the effects of the virus on the department’s operations remains low, particularly while employees continue to work on a rotational basis.