During the budget speech in Parliament today, Minister Pravin Gordhanannounced that the government will be looking into a possible merger of SAA and SA Express, under a strengthened board. Gordhan added he would also be looking at engaging a potential minority equity partner for SAA to create a bigger and more operationally efficient airline.
“What we should stop doing: Corruption and waste. Bailing out state entities,” said the Minister. According to Pravin, state-owned companies have important roles to play in boosting growth and development, but he admitted there have been issues that need to be addressed.
Pravin referred to a recently-released report of the Presidential Review Commission (PRC) on State-Owned Enterprises. The PRC report indicates that the mandates of some of state owned entities overlap, some operate in markets that should be more transparently competitive and some are no longer relevant to the government’s development agenda. “Some are in perpetual financial difficulties,” added Pravin. He said that decisive steps need to be taken to ensure that these entities are effectively governed and that they contribute appropriately to the attainment of the National Development Plan.
Said Pravin: “The strength of our major state-owned companies does not lie in protecting their dominant monopoly positions, but in their capacity to partner with business investors, industry, mining companies, property and logistics developers, both domestically and across global supply chains.”