Cape Town - Eskom, SAA, SA Post Office and other struggling state-owned enterprises (SOEs) have guzzled more than R331 billion in bailouts since 2013, MPs heard.
Treasury officials appeared before the standing committee on public accounts (Scopa), where they painted a worrying picture about the bailouts granted so that SOEs could implement turnaround plans, to repay debt and government guarantees, improve liquidity and for capital expenditure.
“Government has granted R331.2bn in recapitalisations over the period 2013/14 to 2022/23, of which Eskom accounts for 55% of the total recapitalisations,” a report to MPs said.
The report pegged the total recapitalisation amount for SAA – from 2007 until the airline was placed into business rescue in December 2019 – at R22.8bn.
“An additional R16.4bn was allocated (to SAA) over the 2020 Medium Term Expenditure Framework (MTEF) period for the repayment of government guaranteed debt.
“An additional R10.5bn was also made available to SAA in 2020/21 for the implementation of the business rescue plan following the 2020 Medium Term Budget Policy Statement,” the report said.
Finance Minister Enoch Godongwana also said there was an extra allocation of R1bn for the company in his Budget speech last month, which is to be used for the settlement of outstanding business rescue process obligations.
Treasury asset and liability division head Duncan Pieterse told MPs it was clear several SOEs faced “persisting” challenges.
“The various bailouts we’ve had… have become a financial burden and these debt levels and associated bailouts have crowded out important social and other expenditure,” Pieterse said.
Treasury senior financial analyst Mkhulu Maseko said the guarantees portfolio had grown “significantly” to an expected R478.5bn by the end of this month.
A government guarantee is a contractual obligation to cover the SOEs in meeting their financial obligations on loans.
DA MP Benedicta van Minnen said she was concerned by the bailouts to SOEs that “quite frankly, are failing because (the SOEs) are not providing people with services”.
EFF MP Veronica Mente asked whether Treasury was hands on at the beleaguered SA Post Office to avoid a situation where Sapo would return to the Treasury, cap in hand, to request yet another bailout.
Pieterse said Treasury had moved to a situation where, through the implementation of pre-disbursement conditions and other mechanisms, they were granting bailouts to SOEs that were dealing with their structural issues.
“There has been quite a shift (in recent bailouts) and those have come with strict pre-conditions, which those entities have to meet before the funds can flow,” Pieterse said.