SOE downfall: ‘Gordhan should be fired, his department scrapped’

Amid growing business and investor unhappiness about instability at the country’s embattled state-owned enterprises (SOEs), with Transnet and Eskom reeling without permanent chief executives, experts have called on Public Enterprises Minister Pravin Gordhan to step down.

While Gordhan has been too sick to attend public enterprises portfolio committee meetings to account to MPs on the state of SOEs – the latest having led to the resignation of Transnet CEO Portia Derby and CFO Nonkululeko Dlamini – analysts have pointed to his interference in strategic decisions which impacted negatively on board members’ fiduciary duties.

Eskom, meanwhile, has been rocked by reported meddling by Gordhan in moves by its board minister having rejected the recommended frontrunner on the grounds that a shortlist of three candidates was needed.

Derby’s resignation came amid sustained pressure exerted on loss-making Transnet by mining and industry interests, citing the SOE’s inefficiencies.

What is likely to remain a contentious issue is the outgoing CEO’s decision to offer voluntary severance packages to skilled and experienced personnel, now needing to be rehired.

While insiders said Gordhan knew of the severance packages, department of public enterprises (DPE) head of legal, advocate Melanchton Makobe has refuted the allegations as “untrue”.

Interviewed on the Clement Manyathela Show on Radio 702 yesterday, Makobe said Gordhan was “not aware” of the move by Derby to offer packages to employees.

Commenting on the state of SOEs, Wits University economics professor Jannie Rossouw said the DPE had “no reason to exist, because neither the minister nor the department add any value”.

“It also seems that the minister is only involved in SOEs when it suits him and not involved when it does not. The minister’s role in interacting with SOEs is not well defined. “The only solution is to close the department … also getting rid of other struggling SOEs, because these enterprises are not well-run, wasting billions in taxpayers’ money,” said Rossouw.

SA Federation of Trade Unions spokesperson Trevor Shaku said Gordhan’s interference in the running of SOEs would “only become a problem if it stifles crucial efforts by the executive management to turn around the SOE”.

“When it comes to Transnet, we must recognise that the woes of the company were not engineered by Portia Derby or (Transnet Freight Rail CEO) Siza Mzimela.

“(The problems) have been there for some time and have two main sources: the widespread looting of Transnet and other SOEs by the aspirant bourgeois that are using the state as a site of accumulation, and the engineering of crises in SOEs, setting them up for failure to justify their privatisation.

“These executives should not be used as scapegoats of the larger issues of corruption and privatisation.

“Ministers should be called to resign when they are incompetent, corrupt and are anchoring wasteful expenditures.

“Gordhan should resign for selling SOEs to the private sector, such SA Airways to Takatso – not because he is enforcing SOEs’ memorandum of incorporation. Besides, the main culprit in privatisation is the ruling party, not individual ministers.

“Privatisation is the main policy of the ANC.

“The lasting solution to the SOEs is not to sell them to the private sector, but for government to reinvest in these state companies,” maintained Shaku.

Said University of Johannesburg political economist, prof Patrick Bond: “Minister Gordhan was lauded for fighting corruption when he was finance minister, but when his party did a dirty deal with Hitachi at Medupi, gaps became obvious.”