Govt addressing challenges facing Eskom, SAA, Post Office

Thursday, November 26, 2015

Pretoria - The Presidency says government remains on course to address pressing challenges facing state-owned enterprises like Eskom, South African Airways (SAA) and the South African Post Office (SAPO).

Since the announcement by President Jacob Zuma that Deputy President Cyril Ramaphosa would oversee the turnaround of SAA, SAPO and Eskom, various steps have been taken to help create stability in these state-owned enterprises.

These interventions - under the leadership of Deputy President Ramaphosa working in conjunction with relevant government departments and ministries - comprised the finalisation of turn-around strategies with a specific focus on mandate positioning and market development, strengthening of corporate governance structures, stabilising finances and fast-tracking transformation.

“In this regard and with respect to Eskom, government interventions have had a direct impact in the stabilisation of electricity supply while mitigating the effects of load shedding.

“These measures at Eskom, taking place within the context of Cabinet's five-point plan included the appointment of the Chief Executive Officer and Chief Financial Officer, stabilisation of executive management and strengthening the board, while working with Public Enterprises and National Treasury to address some of the pressing funding shortfalls of the institution,” said the Presidency.

The Presidency added that Eskom remains seized with the urgent matter of demand management and measures are being taken to accelerate the build programme.

SAA’s 90-day action plan was successfully implemented and a new turn-around strategy developed and adopted by Cabinet in June 2015.

“Currently, government is in a process of finalising the appointment of a new board of directors as part of efforts to ensure good corporate governance,” said the Presidency, adding that the task of the new board will be to stabilise executive management by recruiting skilled professionals to implement the turn-around strategy as approved by the board and endorsed by cabinet.

It said the formula to helping SAA was similar to that used at Eskom. The formula comprises strengthening the board which in turn recruits and stabilises executive management.

“National Treasury, as shareholder department, continues to work with the leadership at SAA to stabilise the financial situation and to implement the turn-around strategy as approved.

“Similarly, with the South African Post Office, government interventions have led to the appointment of a competent Chief Executive with a clear mandate to revitalise the Post Office by stabilising labour relations, expanding service offerings of the organisation in order to regain the trust of clients and members of the public who receive essential services from the Post Office,” said the Presidency.

There is a new board of directors that oversees the implementation of the strategic turn-around plan as endorsed by the executive.

The Presidency said government remained confident that interventions currently underway would in the long term lead to the sustainability of these institutions, with good corporate governance structures in place and a leadership committed to the advancement of the country's goals as set out in the National Development Plan (NDP).

“We therefore urge all South Africans to give all SOEs a chance to reengineer their operations, sharpen their focus in a considered and responsible manner. We should respect the demarcation of roles and responsibilities especially when it comes to operational decisions which are delegated to boards and executive management,” said the Presidency. -SAnews.gov.za