Mineral resources and energy minister Gwede Mantashe. Picture: Courtney Africa/African News Agency (ANA)
Mineral resources and energy minister Gwede Mantashe. Picture: Courtney Africa/African News Agency (ANA)

Calls to scrap Department of Public Enterprises

By Staff Reporter Time of article published Jan 18, 2020

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Pretoria -  The ANC's national executive committee will have to decide on the continued existence of the Department of Public Enterprises. 

This comes after ANC chairperson Gwede Mantashe used the party's National Executive Committee meeting on Saturday to push for power utility Eskom to be placed under his department, the Department of Mineral Resources and Energy. 

In a move which could be considered as undermining Public Enterprises Minister Pravin Gordhan, Mantashe said he believed Eskom had a better future under his department than under Public Enterprises. Several NEC members joined the chorus calling for Gordhan's department to be scrapped. 

The ANC study group has called for an investigation into the performance of Public Enterprises and the feasibility of SOEs being transferred to other departments. 

The study group will look into the possibility of arms procurement company Denel falling under the Department of Defence and South African Airways falling under the department of Transport. 

Public Enterprises Minister Pravin Gordhan. Picture: Itumeleng English/African News Agency (ANA)
The situation at Eskom and other SoEs has been cited as one of the main reasons for the series of credit downgrades inflicted upon the country. 

President Cyril Ramaphosa and the ruling party's top six will have to decide if scrapping the department will save money while delivering good state services. 

Government is also running out of options for funding sources as the demand for parastatal bailouts surge. 

This is a threat to government's fiscal balances and policy priorities. Standard & Poor's forecast government guarantees at over R500 billion by 2020, which is approximately 10% of South Africa's current GDP. 

This is more than twice the government contingency in 2015/2016. 

Political Bureau

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