Minister of Public Enterprises Pravin Gordhan has lashed out at criticism following the Auditor General’s (AG) scathing report on the status quo at state-owned entities like Transnet and Eskom, in its presentation to the Portfolio Committee on Public Enterprises on Friday.
DA MP and spokesperson on public enterprises, Ghaleb Cachalia, said the presentation had exposed the department as a “crisis-ridden entity that was operating on autopilot”.
“With practically no one in the cockpit, the condition of state-owned enterprises (SOEs) has continued to deteriorate, performance is on a downward spiral, and poor financial management has become the order of the day,” Cachalia said.
He added that SOEs were in a “critical state” and called for Gordhan to “do the honourable thing and resign with immediate effect”.
“Major SOEs like Transnet and Eskom are teetering on the brink of collapse,” Cachalia said.
According to the AG’s report to the committee:
- Despite the presentation of performance targets during the year, the status of SOEs has continued to deteriorate;
- The AG was of the view that the department’s performance target/s did not reflect execution of DPE mandate and the effectiveness thereof;
- "...we have long reported on pervasive mismanagement/leakage of public funds without consequences." – AG;
- "…our audit recommendations not receiving the required attention, with little or no improvement noted in the status quo, leading to our relevance being questioned."
- Lack of transparency – by not reflecting activities linked to mandate;
- Weakening oversight process – as no direct recommendation and intervention can be made if status of SOEs is not reflected; and
- Public could lose confidence in financial and performance results.
Responding to the criticism, Gordhan said in a statement that Cachalia’s assertions were unfounded and aimed to “score cheap political points”.
He said he would not be sidetracked from the work of stabilising SOEs, improving their governance, equipping them with qualified and capable leadership, and making them fit to lead the government’s developmental agenda.
Gordhan vowed to continue rooting out corruption that had left SOEs haemorrhaging money.
“The AG’s presentation to the portfolio committee was a culmination of extensive and
ongoing engagements that are aimed at aligning the work of the department with the stated objectives of government, and that work is informed by be the strategic framework that is beginning to yield significant improvements in the oversight of the SOEs,” Gordhan said.
He added that the DPE, along with the AG, National Treasury, the Department of Planning,
Monitoring and Evaluation (DPME), and other key role players, was determined to ensure
that there was alignment in the performance, set targets and departmental outcomes for the new financial year and beyond.
He said the DPE’s Annual Performance Plan (APP) for 2023/24 entailed key strategic and administrative inputs which the DPE had committed to implementing, including:
- Conclusion of the Strategic Equity Partnership (SEP) transaction for SAA.
- Resolution of Transnet’s sourcing of outstanding locomotives and spare parts from
China’s CRRC e-Loco Supply to revitalise the country’s logistics and freight rail
network.
- Improving Eskom’s power generation capacity to end load-shedding.
- Capacitating SOE boards to deliver on goals.
“The department has been transparent throughout the process of drafting and finalising the
2023/24 APP, including making the AG know of the commitment to remedy the deficiencies
that have already been publicly acknowledged,” Gordhan said.
