Culture of golden handshakes becoming pervasive - R260m spent on ousted parastatal CEOs

Pieter van Dalen, Shadow Deputy Minister of Public Enterprises
26 January 2010

Huge payouts to the failed departing CEOs of South Africa's parastatals have cost the South African public at least R262.1 million over the last decade. This will jump to R347 million if Jacob Maroga is allowed to get his way, and claim a scandalous R85-million payout after resigning as CEO of Eskom. And all of this needs to be viewed in the context of R243.2 billion being offered in financial assistance to State Owned Enterprises (SOEs) under the ANC's watch over the past four years.
 
If paid out, Eskom CEO Jacob Maroga's R85 million claim would be just the latest in a series of staggering salary payouts to unsuccessful executives - a clear indication that parastatals, under the ANC's so-called developmental state model, do little to deliver quality services, but much to support the livelihoods of incompetent ANC cadres.
 
Since 2001, at least R262.1-million has been awarded to parastatal bosses for their part in running their respective parastatals to the ground. This includes:
 

• The R8-million settlement received by former South African Airways (SAA) CEO Khaya Ngqula, after he was fired for his role in the R1-billion tender rigging saga in 2009. 
• In 2004, the former SAA CEO Andre Viljoen received R3.6 million on top of a salary of R2.2 million and a performance bonus of almost R1-million. During Viljoen's last two years at the helm of SAA, the company made losses amounting to R15 billion. 
• Before that in 2001, former SAA CEO Coleman Andrews received a record-breaking golden handshake of R232 million, even though the airline posted a net loss of more than R 700 million for that year. 
• In 2009 the SABC paid R11-million to its former group CEO Dali Mpofu. Mpofu took the SABC to court after he was suspended for suspending then head of news and current affairs Snuki Zikalala.
•  Former Denel chief executive Victor Moche, who was fired from his position by Public Enterprises Minister Alec Erwin, walked away from the parastatal with a golden handshake of about R3 million in 2005. 
• Land Bank CEO Alan Mukoki received R 4.5 million after he quit in 2007 amid R 2 billion worth of fraud.

 
This list, it should be noted, is limited only to payouts received by departing CEOs of parastatals. The culture of golden handshakes, however, extends far beyond that under the ANC; recent examples of Lawrence Mushwana (R7-million) and Vusi Pikoli (R7.5-million) illustrate precisely that point.
 
The ANC's concept of a developmental state places specific emphasis on the primacy of parastatals, and relies largely on what Gwede Mantashe calls "political integrity", rather than actual institutional measures to hold individuals to account for their behaviour. The fact is that these abovementioned payouts are not isolated incidents. The culture of golden handshakes is pervasive, and reflects the wrongheaded politics of the ANC.
 
The DA will be posing questions to the Minister of Public Enterprises in order to establish the true cost of severance packages over the last few years.
 
We cannot continue to pay for incompetence like this. This is money that could - indeed must - be spent on ensuring that parastatals deliver quality services to the public that they are required to, or, otherwise, ought to have gone to addressing the urgent social problems we face in the domains of education, housing and healthcare. Instead, it goes into the pocket of ANC cadres who ran parastatals and the economy into the ground.