Department of Public Enterprises
A Draft Shareholder Bill on state owned enterprises (SOE) will be introduced after cabinet approval.
The public enterprises minister, Pravin Gordhan, confirmed this in his department’s 2022 Budget Vote speech.
The minister added that the necessary legal documents for the setting up of the holding company are in progress and the necessary consultations will be concluded.
He emphasised that it is essential that government reverses the decline of SOEs and positions them to contribute positively.
“We have therefore embarked on several immediate measures to restore these companies to health, at the same time as we undertake far-reaching reforms that will make our SOEs more efficient, competitive, accountable and sustainable”, he said.
The minister pointed out that the Presidential SOE Council, appointed in 2020, has recommended that government “adopt a centralised shareholder model for its key commercial state-owned companies”.
“This would separate the State’s ownership functions from its policy-making and regulatory functions, minimise the scope for political interference, introduce greater professionalism and manage state assets in a way that protects shareholder value”, he said.
Work has begun on the setting up of a state-owned holding company to house strategic SOEs and to exercise coordinated shareholder oversight.
The Presidential SOE Council is also preparing recommendations on SOEs to be retained, consolidated or disposed of.
The minister indicated that any recommendations would be subject to extensive consultation with all stakeholders.
As regards Eskom’s restructuring, the minister pointed out that the legal separation of the Transmission business has made good progress with key asset transfer agreements signed, a legal entity registered and engagements under way with lenders for their consent to the unbundling.
“However, enabling amendments to the Electricity Regulation Act, as well as a new Electricity Pricing Policy, need to be approved as a matter of urgency”, he said.