The days are gone of state-owned entities (SOEs) receiving guarantees from the government without tough conditions, says Pravin Gordhan.
The Finance Minister was outlining the key principles to be met by the SOEs before being handed bail-outs.
In the medium-term budget policy statement on Wednesday in Parliament, Gordhan said the national Treasury would be keeping an eye on under-performing SOEs.
He warned that they continued to pose a risk to public finances.
The state has given billions of rands in guarantees to SOEs over the past few years and Gordhan said they now needed to shape up.
The state was keenly watching SAA, the post office, the South African National Roads Agency Limited and Eskom.
The state had spent almost R20 billion on SAA in the past few years. The Post Office has also been given guarantees of R4bn. National Treasury said on Wednesday it wanted to mitigate risks to these SOEs.
It has appointed boards of directors to better run them. Some of the SOEs have been functioning without full-strength boards. It had affected their business plans, and the government was concerned about these SOEs’ weak balance sheets.
Gordhan warned that key principles must be met before the government could intervene in future when the SOEs got into financial trouble.
Entities receiving support were also required to demonstrate sound business plans, improve governance and address operational efficiencies.