Pravin Gordhan delivers final blow to collapsed SOEs

Issued by Ghaleb Cachalia MP – DA Shadow Minister of Public Enterprises
10 Oct 2023 in News

If Jacob Zuma collapsed SOEs through state capture, the Minister of Public Enterprises Pravin Gordhan, has spent the past 5 years writing and certifying their obituaries.

Since his appointment to the Public Enterprises portfolio in 2018, Gordhan has presided over an unprecedented governance chaos at Executive and Board level in State Owned Enterprises (SOEs). The damage inflicted by this governance crisis has been so severe that most SOEs are either operating with interim Boards, acting CEOs or with no Executive heads at all.

Gordhan’s position as the Minister of Public Enterprises has become untenable and the DA calls on President Cyril Ramaphosa to fire him immediately.

With the Department of Public Enterprises (DPE) expected to cease operations after the 2024 elections, it should – in the interim, be placed under the administration of a select panel of industry experts. Their brief should be the stabilization of SOEs through the appointment of competent Boards and Executive heads, including the removal of operational bottlenecks that have hobbled the performance of these entities.

Despite making grandiose promises to reverse the devastating impact of state capture and place SOEs on a positive path of recovery, Gordhan has instead collapsed them through operational drift brought about by a revolving door of Executive and Board appointments. Just yesterday, Eskom Board Chair, Mpho Makwana, resigned as Eskom Board chair leaving behind a company that has been without a substantive CEO for over 7 months and counting.

The depth of the governance crisis triggered by Gordhan’s failure has become endemic to such an extent that SOEs are essentially in operational drift with no strategic direction:

Entity  Status of Executive and Board 
  • Transnet has no CEO after the resignation of Portia Derby
  • Of the 12 independent non-executive directors, six have subsequently resigned or retired without being replaced
  • Eskom has had no CEO for 8 months since the resignation of Andre de Ruyter in February
  • Eskom Board Chairperson resigned on 9 October 2023
  • Denel has operated under 3 acting CEOs from 2020 to date
  • Denel is operating under an interim Board
South African Airways
  • SAA has operated under 4 acting CEOs from 2019 to date
  • SAA has operated under an interim Board from 2020 to date
South African Express
  • The final liquidation order for South African Express was granted in September 2022
  • Alexkor has been under an acting CEO since 2022

Gordhan is good at pointing fingers and has never once taken responsibility for the chaos currently occurring in SOEs. Even at the height of state capture, Transnet was still able to keep our export sector ticking along, but under Gordhan, the entity’s ability to transport goods to ports has significantly collapsed.

Gordhan has become a liability, not only to the well-being of SOEs but to their entire national economy and should be fired as a matter of urgency. Then we can get down to the real business of restoring governance, privatizing as appropriate and dispensing with barking mad policies and procedures around preferential procurement, cadre deployment and BBBEE. Only then business, industry and citizens will be able to breathe again as we rebuild the spine, heart and arteries of our economy.

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