The state is pondering whether it would make sense to consolidate or merge some of its more than 700 state-owned entities on the back of a Presidential Review Commission report, which was released this morning.
While the report has made several recommendations, including major reforms to strengthen the entities, the detail has yet to be worked out. Government will now set up an inter-ministerial committee, which will examine the findings and revert to Cabinet with a way to implement the report's recommendations.
As a result, there is still no clear indication from government as to how it will manage its 40% stake in Telkom, or its investments in Broadband Infraco and Sentech. There have previously been suggestions that the state's telecoms investments may be brought under one umbrella.
Addressing the media this morning, minister in the Presidency, Collins Chabane, explained the committee was set up to strengthen the role of state-owned entities and improve policy governing these institutions.
Developmental drive
The goal of the review was to "achieve a balance between national developmental and transformation objectives, improved governance, improved performance, and improved service delivery as well as to achieve sustainable viability of SOEs in alignment with the developmental state aspirations," said Chabane.
Chabane said the review says the state needs to articulate consistent strategy for state-owned entities, ensure government policies and practices are in place, and there is effective contact between regulators, agencies, government and the entities.
In addition, the purpose of state-owned entities needs to be defined, said Chabane. The committee proposed a phased approach to implementing its recommendations, with initial steps within two years, a medium-term phase to be wrapped up in five years, and full implementation over the long-term.
Committee deputy chairman Glen Mashinini says the review is "still a process" and details are yet to be worked out, depending on the inter-ministerial committee and Cabinet's decisions. He added there may be low-hanging fruits that can be merged or removed, and some of their non-commercial functions assimilated into departments, but these entities have not been identified.
Chabane said decisions cannot be made quickly, as the state is dealing with huge entities, with large balance sheets. In addition, in some instances - such as Telkom - other shareholders need to be taken into account.
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