SOE review committee terms of reference still to be finalised

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The terms of reference of an independent review committee to probe South Africa’s state-owned enterprises (SOEs) that includes Denel and several airlines are still being finalised. That’s the word from President Jacob Zuma in answer to a question by Democratic Alliance Parliamentary leader Atholl Trollip who noted the committee was mooted 143 days ago.

Zuma in his May budget vote said the Medium Term Strategic Framework released last year stated the need for a review of State Owned Enterprises (SOEs) as part of the government’s economic transformation agenda. “We have to ensure that while they remain financially viable, the SOEs, development finance institutions as well as companies in which the state has a significant shareholding must respond to a clearly defined public mandate, and help us to build a developmental state. I have appointed a Presidential SOE Review Committee to undertake this important work,” he said on May 13. He also appointed Mangwashi Victoria Phiyega chairwoman and gave her a year to complete her task.

Performance and evaluation minister Colins Chabane last month said this committee work in parallel with a Cabinet-established Inter-Ministerial Committee (IMC) co-chaired by Ministers Barbara Hogan and Pravin Gordhan to conduct an internal government review of SOEs “to determine how government can strengthen alignment between its development objectives and the strategic role to be played by SOEs in the economy.”

Trollip recently asked whether Phiyega’s team would be paid to which Zuma in a reply made public yesterday said the “issue of remuneration cannot be pronounced categorically until discussion and agreement has been reached by all parties involved. The terms of engagement will be based on guidelines from DPSA and Treasury Regulations for similar services.”

Zuma also said the mandate of the IMC is different from that of the SOE Review Committee. “The terms of reference are in the process of being finalised and will be communicated in due course.”

The response left Trollip unimpressed. “The President’s vague response constitutes yet further proof that the Zuma administration is entirely uncommitted to this undertaking, which now appears to be yet another example of smoke and mirrors, and places talk above actual outcomes,” he said.
“One would have thought, and it is entirely reasonable to expect, that before announcing something as fundamental as a review, some thought would have gone into the structure of that review, its mandate, purpose and desired outcome. But the shambolic nature of the idea’s implementation suggests rather that it was nothing more than a spontaneous thought that popped into the President’s head, a spur of the moment impulse that was ill-considered and not properly conceived. And what we are now watching unfold are the consequences of that confusion.
“The Zuma administration has thus far failed to develop a coherent strategy to address the poorly-performing ‘money pits’ that the country’s SOEs have become. Despite going to the very heart of the way that our economy is managed and its relationship to the state, not even a sentence was dedicated to the issue in the President’s State of the Nation address earlier this year.”



Trolip recalls Zuma first announced the government’s intention to conduct a review of the country’s SOES “almost as an aside, in a subsequent interview with the Sunday Times, and has since displayed increasing reluctance to follow through on this commitment. This is an administration which is big on announcements, but poor on delivery.”