THERE is something dysfunctional about the way the government is dealing with the financially fragile state-owned companies.
And it is hard not to wonder about the extent to which tensions and turf battles within the government itself are hampering efforts to fix these companies.
The Cabinet’s decision last month to replace the Department of Public Enterprises with the National Treasury as shareholder department for South African Airways (SAA) was peculiar enough. But we now discover that the prize, at least from SAA’s point of view, was a R6.5bn bail-out in the form of an additional guarantee facility. This brings the total which the Treasury has extended in guarantees to more than R14bn. And, crucially, it makes SAA enough of a going concern to enable the auditors to sign off the long-awaited financial results.
But why didn’t the Treasury say so in the first place? Markets had been wondering why the ailing airline suddenly seemed to be a going concern for no apparent reason and could now set a date for its results. The guarantee is quite clearly material and should have been disclosed at the time it was extended. That it was not, raises questions about the dynamics within the government
The disconnect around Eskom is even more bizarre. It has been saying publicly that the cost of keeping the lights on is putting huge strain on its cash resources, and its previous shareholder minister, Lynne Brown, also warned that Eskom will soon run out of money. But her counterpart at finance says he has received no formal request for further financial assistance, over and above the cash injection that was agreed to in October — but is yet to be raised by the Treasury.
Is this a matter just of procedural niceties? Do our Cabinet ministers not talk to each other? Or is Eskom just making it up?
The finance minister has accused Eskom of being irresponsible for crying poverty, as it were, when it hasn’t even asked for cash. But its cries do seem to have speeded things up all of a sudden — on Thursday the Treasury said Eskom would be receiving a first payment on the October package as early as June.
Meanwhile, we await details of coherent plans to turn around both these companies — plans we hope will have the support of the entire Cabinet rather than being the subject of sniping within it.
A South African Airways Airbus A320. Picture: SAA
THERE is something dysfunctional about the way the government is dealing with the financially fragile state-owned companies.
And it is hard not to wonder about the extent to which tensions and turf battles within the government itself are hampering efforts to fix these companies.
The Cabinet’s decision last month to replace the Department of Public Enterprises with the National Treasury as shareholder department for South African Airways (SAA) was peculiar enough. But we now discover that the prize, at least from SAA’s point of view, was a R6.5bn bail-out in the form of an additional guarantee facility. This brings the total which the Treasury has extended in guarantees to more than R14bn. And, crucially, it makes SAA enough of a going concern to enable the auditors to sign off the long-awaited financial results.
But why didn’t the Treasury say so in the first place? Markets had been wondering why the ailing airline suddenly seemed to be a going concern for no apparent reason and could now set a date for its results. The guarantee is quite clearly material and should have been disclosed at the time it was extended. That it was not, raises questions about the dynamics within the government
The disconnect around Eskom is even more bizarre. It has been saying publicly that the cost of keeping the lights on is putting huge strain on its cash resources, and its previous shareholder minister, Lynne Brown, also warned that Eskom will soon run out of money. But her counterpart at finance says he has received no formal request for further financial assistance, over and above the cash injection that was agreed to in October — but is yet to be raised by the Treasury.
Is this a matter just of procedural niceties? Do our Cabinet ministers not talk to each other? Or is Eskom just making it up?
The finance minister has accused Eskom of being irresponsible for crying poverty, as it were, when it hasn’t even asked for cash. But its cries do seem to have speeded things up all of a sudden — on Thursday the Treasury said Eskom would be receiving a first payment on the October package as early as June.
Meanwhile, we await details of coherent plans to turn around both these companies — plans we hope will have the support of the entire Cabinet rather than being the subject of sniping within it.
Post a comment