President Cyril Ramaphosa has reassigned the responsibility for state-owned enterprises from the now-defunct department of public enterprises to their respective line-function ministries.
President Cyril Ramaphosa has reassigned the responsibility for state-owned enterprises (SOEs) from the now-defunct department of public enterprises to their respective line-function ministries.
This will see responsibility for power utility Eskom transferred to the department of energy and electricity and that of rail, port and pipeline company Transnet to the transport portfolio.
Ramaphosa said he had effected the proclamation in terms of section 97 of the Constitution, which allows him to redistribute the powers and functions of key national entities among various government ministers.
As part of the changes, state-owned diamond mining company Alexkor will now be managed by the department of mineral and petroleum resources, Ramaphosa said in a statement.
Denel, the aerospace and military technology conglomerate, will fall under the ministry of defence and military veterans, while Safcol, responsible for state forestry, will report to the ministry of forestry, fisheries, and the environment.
Like Transnet, SAA and South African Express, the national and regional airlines, respectively, will be administered by the transport minister.
The restructuring appears to be an about-turn from Ramaphosa’s announcement in July that SOEs would fall under the direct control of his office, with Minister of Monitoring and Evaluation Maropene Ramokgopa taking charge of their restructuring.
The dissolution of the public enterprises department was part of the government’s strategy to consolidate the ownership of strategic SOEs under a state asset management company.
This plan, outlined in the draft National State Enterprise Bill introduced by former public enterprises minister Pravin Gordhan in January, would grant the holding company budgetary and managerial autonomy.
The Bill proposes that the company be led by an independent board of directors, selected by representatives from business and labour, along with two cabinet members, with the nomination process chaired by a retired judge.
The move to place SOEs under line ministries has faced both support and opposition.
Last week, Deputy Minister of Electricity and Energy Samantha Graham, a member of the Democratic Alliance, said her party, which is now in the government of national unity, would take legal action against any moves to put Eskom under the president’s office.
She said such a move would contradict earlier expectations that the electricity ministry would have direct oversight of the utility.
Ramokgopa has been given executive authority over the department of public enterprises, which will continue to exist and operate until the human and financial resources are transferred appropriately, Ramaphosa said.
He added that Ramokgopa will be responsible for the finalisation of the National State Enterprise Bill, which will set out the exercise of shareholder responsibility for respective SOEs to be transferred in a phased manner into the envisaged national enterprise holding company.