Parliament - Finance Minister Pravin Gordhan insisted on Wednesday that he was not planning to privatise parastatals, but to find them minority equity partners as he tabled an annual budget that put a fine point on refusing further bailouts for troubled state-owned enterprises.
"It is important that we begin to move in a direction where the word bail-out disappears from our vocabulary," he said, before conceding that this might not happen overnight.
Gordhan rejected suggestions at a media briefing shortly before his budget speech that he was turning to privatisation as an alternative.
"Don't be tempted to use the P-word, because I haven't used it," he said. "We are not talking about privatisation, we are deliberately talking about minority equity participation, right, and we are talking about co-investment in these projects."
Gordhan confirmed that in this regard, government would start with Transnet and troubled national carrier South African Airways. Treasury and the minister of public enterprises have agreed to mull a merger of SAA and indebted short-haul carrier South African Express, and to find an equity partner for the new, bigger airline they would form together. The country did not need four airlines, the minister said, and told reporters that to his mind, there were simply "too many" parastatals.
Hence those no longer deemed useful would shut down, while the board of those remaining would be scrutinised to see whether they comprised the right people. Again SAA was mentioned as a priority, with Gordhan revealing that he was poised to appoint a new board for the airline in coming weeks.
"There are proposals that have been made in respect of a new board for SAA and we are hoping that within the next few weeks we conclude deliberations on that, take it to Cabinet and the new board will be in place because having a new board is absolutely essential for the rest of the process to kick in."
He defined the process as putting in a place a solid management team and devising a "financially credible plan for SAA", which the minister conceded could take a couple of years.
The appointment of a new board has been expected since Gordhan returned to the finance porfolio in December.
Late last year Treasury became embroiled in a tussle with SAA chairwoman Dudu Myeni, who defied warnings from its senior officials not to renegotiate an aircraft lease agreement with Airbus. Then finance minister Nhlanhla Nene eventually ordered her to honour the initial contract.
When President Jacob Zuma, to whom Myeni is close, fired Nene shortly afterwards, there was much speculation that this had been one of the reasons for his removal.
Gordhan wasted little time in reiterating Nene's stance on Airbus and forced Myeni to toe the line. Asked whether he believed that he had adequate political support for the changes he planned, Gordhan quipped that time would tell, but stressed that his proposals had been approved by Cabinet.
These are not ideas that I cooked up yesterday. These are ideas that have been generated through processes that involve Cabinet, so if you see me sitting here in October, then I have political support, if you don't see me here in October, then I don't.
"That's how life works, isn't it?"
He said he could give no timelines for finding equity buyers for SAA and Transnet, but the process of identifying parastatals that should be shut had already begun, in particular at provincial level.
African News Agency (ANA)