Taking the general truth of “a direct question deserving a direct answer” Public Enterprises Minister Pravin Gordhan gave a straight “no” when asked if he would resign by an Inkatha Freedom Party (IFP) public representative.
Elphas Buthelezi’s question, which received a written negative with an exclamation mark for emphasis, sought to establish if the Public Enterprises Minister would resign from President Cyril Ramaphosa’s Cabinet. This the KwaZulu-Natal National Assembly (NA) member asked in the light of the “failure” of State-owned entities (SOEs) “under his [Gordhan’s] watch and administration”.
The emphatic “No” was supported by a brief insight into six SOEs, including defence and technology conglomerate, Denel.
This was prefaced by Gordhan stating in writing “each SOE is on a challenging recovery path and each has met with some success.”
On Denel, Gordhan said the Irene, Centurion-headquartered conglomerate was “faced with significant viability challenges” over the past three years.
“Malfeasance linked to State Capture and poor management decisions resulted in a steep decline in revenues and profitability since 2017/18, reversing a seven-year trend of good governance, growth, and profitability. This culminated in in a weak balance sheet, declining order book, poor operational performance, unpaid salaries and suppliers which resulted in an erosion of key defence industrial capabilities and loss of critical skills.
“Government has made significant interventions to stabilise the SOC. In the past five financial years, the State has injected into Denel approximately R9 billion, including settling guaranteed debt which was keeping Denel in a debt trap due to high interest payments. The intervention has resulted in an appreciable improvement in the market sentiments (employees, clients, partners, financial institutions, and suppliers) regarding the clarity of Government’s strategic intent with respect to Denel,” Gordhan’s response reads in part.
It continues: “The focus in the near term, the Department [of Public Enterprises] is inducing Denel to optimise on short term revenue opportunities to ensure that the SOC can fund its operational requirements and deliver on existing contracts”.
“Despite the challenges of the prior years, the interest by both local and international entities as well as governments to collaborate with Denel on various defence technologies remains high.”
Other SOEs given a brief rundown in the Buthelezi response are Eskom; Transnet; mining and metals company Alexkor; SAA and SAFCOL (SA Forestry Company Ltd).