Zuma explains SOE review

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President Jacob Zuma says a two-pronged review of state-owned enterprises (SOEs) including Denel and South African Airways will culminate in a united government position on the role of the SOEs in supporting government’s developmental agenda.

“The two processes are complementary and will culminate in a single synthesised report for consideration and decision making by Cabinet,” he said in reply to a question by the Democratic Alliance yesterday afternoon. DA parliamentary leader Athol Trollip had asked whether the review of state-owned entities will look at the impact of government’s propensity to appoint only persons of a certain political organization on public entities.

Zuma said first part of the review will be undertaken internally in government under the leadership and oversight of the Inter-Ministerial Committee that is co-chaired by Public Enterprises Minister Barbara Hogan and Finance Minister Pravin Gordhan.
“As Members would recall, the Medium Term Strategic Framework (MTSF) which we released last year, states that we should integrate State Owned Enterprises into our planning processes and improve the monitoring and evaluation of their performance,” Zuma told the National Assembly.

The first part of the review will make recommendations on issues including “how government can strengthen alignment between its development objectives and the strategic role to be played by SOEs in the economy in the period ahead; coordination of infrastructure investment by SOEs to ensure that the country has the capacity ahead of demand and ensuring that it is coordinated with the rollout of the required infrastructure; how to ensure an effective and transparent regulatory process for SOEs; strategies for utilising SOE investment as a means for localisation and industrial development; and the revival of the role of SOE in skills development and training.
“The second part of the process will be undertaken by an independent panel of experts assisting the Presidency and the Inter-Ministerial task team. The terms of reference are still being finalised, Zuma added. He continued that it is envisaged that this process will focus on reviewing current governance arrangements relating to SOEs; undertaking an audit of current practices regarding planning and decision making within SOEs, as well as between SOEs and government; and, undertaking a critical assessment of the role SOEs have played in supporting government’s development objectives.
“The two complementary streams of work will be overseen and coordinated by the Presidency.

Once completed, the work will be submitted to the Presidency for synthesis into a final report that will serve in Cabinet before its recommendations are adopted and implemented as government policy.”