The National Treasury should step in and ensure that one state owned enterprise gives preference to the services of another state-owned enterprise (SOE) to help one another during the current global economic slowdown.
Steve Harris, General Secretary of the United National Transport Union (UNTU), says this is the type of intervention the union expects from the National Treasury after Mcebisi Jonas, Deputy Minister of Finances, announced at the 6th National Congress of the Federation of Unions of South Africa (Fedusa) that Government will hold SOE’s more accountable in future and are changing their landscape very fast.
“It is very disappointing to hear that the Gautrain has three bidders for the procurement of 12 new trains, but that Transnet, which operates nearly three-quarters of the entire African rail network, is not named amongst them. Instead of using South Africa’s expertise at Transnet the Gautrain is waiting for Bombardier Transport (Pty) Ltd, CRRC E-Loco Supply and Egoli Rail Consortium to submit their final bidding in May next year.
“At the same time, Transnet plans to spend about 20 billion rand on mergers and acquisitions in South Africa and the rest of Africa. The company has to look for new avenues of revenue. Transnet remains R38 billion (42%) below budget due to declining commodity export volumes stemming from the slump in mineral prices. It only makes sense to force SOE’s to give preference to one-another,” says Harris.
Earlier this year UNTU also questioned why the Passenger Rail Agency of South Africa (PRASA) signed a memorandum of understanding with China Communications Construction Company to explore various infrastructure development initiatives, key amongst them being the Moloto Rail Development Corridor.
According to Harris PRASA also could have used the services of Transnet who is the Rail expert in South Africa and considered a world leader.
“Just imagine how job creation in South Africa could have been enhanced if PRASA spent some of its R14,6 billion irregular expenditure on Transnet,” Harris says.
The National Treasury has been engaged in open conflict with SOE’s in recent months over their management and spending plans. The department issued a statement last month saying it is threatening court action to stop a joint venture in Asia by arms company Denel SOC Ltd. It has also said that power utility Eskom Holdings SOC Ltd. is resisting a review of its contracts.
Then Jonas explained that National Treasury has a central role in overseeing the fiscal health of the country and that is why they have an interest in looking at the financial performance of all SOE’s.
For enquiries phone Harris on 082 566 5516.
Issued on behalf of UNTU by Sonja Carstens, Media and Liaison Officer. For UNTU Press Releases e-mail sonja@untu.co.za or phone 082 463 6806.
