MegaBanner-Right

MegaBanner-Left

LeaderBoad-Right

LeaderBoard-Left

Home » Featured IND » Putting 740 Humpty-Dumpty SOEs back together again

Putting 740 Humpty-Dumpty SOEs back together again

Mr Geoff Jacobs, President of the Cape Chamber of Commerce and Industry comments on the Presidential State-Owned Enterprise Council

WE now have a Presidential State-Owned Enterprise Council given the monumental task of making all 740 State Owned Enterprises (SOE’s), including Eskom, “effective instruments for economic development”.

In normal times, which some suggest ended a decade ago, this announcement would be greeted with extravagant praise from the private sector which relies heavily on some of them, particularly Eskom.

However, there is a limit to the number of times that hope can triumph over experience, and in the last decade the record of Government plans turning into reality, leaves much to be desired.

Granted, this new body has admirable aims. The question is whether those appointed to it have the power, knowledge, influence and determination to accomplish its objective.

First up will be the unpleasant but necessary task to remove those employed by the SOEs for reasons other than their abilities.

Bluntly, every SOE employee will have to learn some hard lessons. Facing economic realities will be the first. For example, like in any business in the private sector, SOE managers will have to accept that they do not own the business. The business is owned by the State on behalf of the taxpaying citizens. It is not owned by politicians either.

Another lesson from the private sector is that having a job in an enterprise is not a guarantee of cradle-to-grave support. Length of employment is entirely dependent on the health of the business, which in turn is directly attributable to the performance of its employees. Put simply, if any business is not run efficiently, loses money and customers, it has to either change its ways or die; sometimes that means cutting back staff.

But perhaps the most important lesson of all that the SOEs – management and workers alike – will have to learn is that unless the trade unions line up behind this new Council, no one will win the resulting conflict. As surely as night follows day, such a battle will ensure the death of the entire enterprise.

Another danger is that the Council will operate under a covert instruction to preserve the 740 SOEs at all costs. If so, the whole exercise will be yet another case of throwing good money after bad. That such a policy trend still exists is suggested by the announcement that  the Central Energy Fund, the Strategic Fuel Fund and the white elephant of Petrosa will be shoved together into a National Oil Company – a clear case of marrying two capital rich SOEs with one that has delusions of grandeur and a vast appetite for other people’s money.

In sum, while wishing this Council well, past experience suggests that unless it is backed up with the power to take unpopular decisions, and unshackled from political ideology, it will join the many plans and programmes we have seen since 1994 that have come with fanfare and have disappeared without a peep.

To enquire about Cape Business News' digital marketing options please contact sales@cbn.co.za

Related articles

Solar company criticises flaws in Eskom’s solar registration announcement

Leading solar solutions provider Alumo Energy has pointed to glaring issues and holes in Eskom’s recent announcement offering zero registration fees for Small-Scale Embedded...

Opinion piece: Empowering South Africa’s IPP’s for a renewable future

By Francois van Themaat, MD of large projects at Sustainable Power Solutions (SPS) MANY crucial parts of the economy of the future will be hugely...

MUST READ

City delivering real change

Behind every budget line, every policy, and every project there are real people, real challenges, and a shared future we are shaping. In a...

RECOMMENDED

Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookies

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.