Privatisation is no aim but revenue constrains plans

Donwald Pressly

PRAVIN Gordhan went to great lengths to avoid any association with the “P” word – privatisation – yesterday.

The confusion arose from the Budget Review chapter on asset and liability management. “To sustain their infrastructure plans, state-owned companies need strong balance sheets. The government is reviewing its holdings of these entities to direct capital to investment priorities.”

It goes on: “It will also be necessary to forge strategic partnerships with private firms to co-invest and bring technical expertise to large public infrastructure projects.”

The review said an example of this approach had been the renewable energy independent power producer programme, which attracted R46.6 billion worth of investments from the private sector in 2012/13.

Answering a question on the selling of state assets during a media briefing ahead of his Budget speech, Gordhan said: “The real issue here is if revenue continues to remain a constraint… if revenue continues to fall, then we have got to look for other sources of income.”

One way to deal with the conundrum was to cut expenditure “but we will not cut to the point of imposing austerity… this government will not.”

Longer-term measures to promote revenue growth were looking at assets “that are owned by the state that could be better deployed in the cause of development in this country… rather than sitting in some space.”

Pressed on whether this meant privatisation, the minister said emphatically: “The answer is no… that is not the issue. Let us dispense with that. The issue there is… we have a revenue squeeze. There are a lot of things we want to do.”