Officials running parastatals equipped for position, says Ramaphosa

CAPE TOWN — Deputy President Cyril Ramaphosa on Wednesday denied that those running the country’s parastatals were ill equipped to do so or that they occupied their positions merely by virtue of political affiliation.

He was replying in Parliament to a question whether he intended to “change the government’s approach of deploying political cadres in strategic positions while they are not competent”.

“It is critical that people appointed to the boards of state-owned companies demonstrate the requisite experience‚ skills and commitment to effectively fulfil their functions. This is an imperative that government takes seriously and to which he dedicates much time and effort‚” the deputy president said.

But he added: “We must dispel the myth that the people who run our parastatals are ill equipped to do so‚ or that they occupy their positions merely by virtue of political affiliation.

“An honest assessment of leadership in our parastatals will prove that such claims are untrue.”

He pointed out that‚ in December 2014‚ Cabinet had approved the establishment of a task team to develop common principles for persons nominated to serve on boards of state and state-controlled institutions.

He also stated that there were several reasons why some state-owned companies under-performed‚ including “high operating costs‚ and poor operational performance‚ unclear policy frameworks‚ from difficult‚ highly competitive and rapidly changing operating environments and weak management and governance”.

He added that state-owned companies were an important part of the economy and remain essential to advancing government’s industrialisation programme and broader development objectives.

Over the past four years‚ state-owned companies had invested nearly R470bn in the economy.

“These challenges have been identified in the Presidential Review Committee on State-Owned Entities‚ which has made a number of far-reaching recommendations.

“As we reported in the Presidency budget vote debate‚ notable progress has been made in turning around Eskom‚ South African Airways and the South African Post Office.

“In addition‚ government has tabled the bills for the appropriation of the R23bn equity injection it committed to provide to Eskom and the amendment bill for the conversion to equity of the subordinated loan. Both of these interventions will strengthen Eskom’s financial position. Government is firmly on track with the sale of the assets to fund the allocation to Eskom which will ensure that there is no impact on the budget deficit.

“The going-concern status of South African Airways has been restored; through the 90-day action plan cost savings of R1.2bn will be realised. The long-term turnaround strategy is being refined and has been encapsulated into the company’s corporate plan‚” Mr Ramaphosa said.