Public Enterprises Minister Lynne Brown began her budget vote speech on Tuesday in an amiable mood, shrugging off the customary heckling from opposition benches without breaking her stride.
“I have been wondering when I would hear boring-voice Pink Shirt - Honourable Pink Shirt,” she mocked DA heckle-meister Ian Ollis after one of his interjections.
“Would the Honourable Golden Dress take a question?” Ollis fired back.
But Brown might as well have been wearing a target instead of the attire in question and by the time she returned to the podium to wrap up the debate her mood had soured.
One after the other, opposition speakers tore into the state-owned enterprises overseen by her ministry, drawing on recent revelations about the alleged favouring of the Gupta family in contracts with Denel and Eskom to buttress calls for the department to be scrapped.
The EFF's Sam Matiase went further, arguing that attempts by the family to influence former minister Barbara Hogan and the offer of the post to former ANC MP Vytjie Mentor showed Brown herself must have been “appointed by the Guptas”.
Pieter Groenewald of the Freedom Front Plus said Brown had allowed a joint venture company formed with a Gupta-linked firm to represent Denel at an international arms fair.
This amounted to “international fraud”, considering the partnership had not been given the required ministerial approval.
His speech, especially, got the minister’s goat.
She reminded him of the country’s “painful past” and said being shouted at by Groenewald - whose comments were made mostly in Afrikaans - reminded her of a “horrible experience” she’d had 21 years ago.
That the Public Enterprises budget debate provoked such heated personal exchanges was hardly accidental, given the place of state-owned companies in the bigger economic drama and an unfolding contest over the role of the state in the economy, also linked to the battle over who should benefit from its interventions.
In this drama, Brown and her department play a central but contested role - a fact to which the minister alluded when she said delays in tabling legislation intended as a framework for state-owned enterprises reform were the result of “competition” among them.
One strand of the bigger narrative is about past forms of “state capture” in which a tiny dynastic elite formed corporate giants that grew to tower over the economic landscape.
This resulted in the phenomenon of four or five big players dominating significant sectors of the economy, including mining, banking, manufacturing and, for that matter, the media.
Attempts to dismantle “white monopoly capital” to create space for new, black entrants have made only superficial gains and the ANC’s push for “radical economic transformation” is precisely in response to the cries of frustration about this failure.
State-owned companies are intended to play a driving role in this project by using their vast procurement budgets to support South African, particularly black, industry and suppliers, while deepening the country’s industrial capacity.
This has been evident in Transnet’s procurement of locomotives and carriages.
Brown announced the delivery to Botswana, to be completed this month, of passenger coaches engineered and manufactured by Transnet Engineering, with plans for the enterprise to become a locomotive manufacturing hub for the continent.
According to the department’s strategic plan, 65 percent of Eskom’s targeted R66.4 billion capital expenditure in the coming financial year will be spent in South Africa. Transnet is to spend 75 percent of its R22.8bn capital expenditure budget in South Africa. Unsurprisingly, numerous players have been jockeying for position in the queue of potential beneficiaries of the contracts that will flow from this enormous expenditure.
Among them have been the Guptas, who are alleged to have tried to jump the queue by acquiring the services of political agents and state officials to tip the scales in their favour.
But, as Brown pointed out in her speech, the Guptas account for 1.8 percent of Eskom’s R45bn coal bill through the Optimum coal mine, which they bought from mining giant Glencore with the assistance of Mineral Resources Minister Mosebenzi Zwane.
Four large companies - owned by four families, according to Brown - supplied R23bn, or 51 percent, of Eskom’s coal needs.
Not only that, but Eskom paid up to R900 a ton for coal from these companies, compared with R150 a ton for the Optimum coal and, for 40 years, had paid towards the capital costs of their mines.
This, in effect, subsidises the construction of their mines.
These contracts were to expire in two or three years, so there was an opportunity to “restructure the economy around coal”, Brown said.
In other words, the country stands at a crossroads, with one path leading towards a zero-sum cul de sac in which a tiny elite squabble over their portion of an ever-diminishing pie while the majority live off the scraps, and the other towards a more open and
inclusive economy in which new entrants get material and other assistance from established players and the state in a mutually beneficial development project that cuts out the political fixers.
Political Bureau