PRETORIA, June 6 – Chief executive officers of state-owned companies (SOCs) on Wednesday detailed a number of concerns about the legal and regulatory environment within which SOCs operate, which are often ill-suited to the specific needs of entities and constrain innovation, the Presidency said.
President Cyril Ramaphosa met with chief executives of over 20 key state-owned enterprises (SOCs) at the Union Buildings on Wednesday afternoon to discuss the contribution these SOCs can make to economic revitalisation and social development.
The chief executives present at the meeting were from the Airports Company of South Africa, Alexkor, Armscor, Air Traffic and Navigation Services, Central Energy Fund, Development Bank of SA, Denel, Eskom, Industrial Development Corporation, Land Bank, Necsa, PetroSA, Passenger Railway Agency of SA, Rand Water, SA Express, South African Airways, the SA Broadcasting Corporation, South African Forestry Companies Limited, South African National Roads Agency, SA Post Office, Trans-Caledon Tunnel Authority, Transnet and Umngeni Water.
Ramaphosa requested the meeting to hear the views of the executive leadership of strategic state-owned entities on the challenges they confront in implementing their mandates and the opportunities they have identified to strengthen this sector.
This comes on the back of alleged shareholder interference following resignations by Eskom chief executive Phakamani Hadebe who tendered his resignation last month, and South African Airways chief executive, Vuyani Jarana, who also resigned from the airline citing mounting debt and lack of support from government.
In a statement, the Presidency said that Ramaphosa emphasised the critical role of SOCs in meeting social needs and driving economic growth, and reaffirmed government’s determination to strengthen these entities and ensure their sustainability.
The Presidency said Ramaphosa noted that several entities are facing severe financial and operational challenges that pose great risks to the South African economy.
In their contributions, several executives highlighted the need for a better definition of the respective mandates of state-owned companies and for government policy to more effectively support their achievement.
The executives also raised challenges about the exercise, by government shareholder representatives, of their oversight responsibility and inconsistency in the appointment of boards.
The Presidency said the meeting recognised that SOCs have considerable resources and capabilities that, if better coordinated and managed, could have a far greater impact on economic growth and job creation.
Ramaphosa said the engagement had raised several critical areas that limit the ability of SOCs to drive growth and development.
“These range from inadequate capitalisation and poor governance to outdated legislation and political interference. As government, we are committed to work with the leadership of SOCs and stakeholders to urgently address these difficulties,” Ramaphosa said.
“I appreciate the frank and open manner in which the executives have raised their concerns. Their insights and suggestions are truly refreshing and will greatly assist our efforts to revitalise our state-owned companies and ensure that they properly perform their mandates.”
The Presidency said the inputs made by the executives will form part of the initial programme of the Presidential SOC Council, announced by the President earlier this year, to provide political oversight and strategic management to reposition and revitalise SOCs as catalysts for economic growth and development.
– African News Agency (ANA);