No new cash bailouts of struggling and underperforming SOEs - Godongwana

CAPE TOWN - As in previous years, Finance Minister Enoch Godongwana looks set to continue his tough love approach towards state-owned enterprises (SOEs) with no new bailouts.

While government provided guarantees to Transnet and Eskom last year, there are no new cash bailouts for struggling and underperforming SOEs.

Treasury highlighted how the cushioning of SOEs “has become a drain on the fiscus”.
 
Godongwana said bailouts of SOEs have eroded the “policy space” as they require the redirection of resources from priorities like education.

While Transnet won’t be receiving any bailout, Godongwana said the logistics giant would be provided with a R47 billion guarantee, but with conditions.

"Like Eskom, the guarantee comes with conditions. These conditions require Transnet to focus on its core activities and for the entity to introduce private-sector partnerships.

"Other struggling SOEs, SAA, and the South African Post Office may have received support previously, but the likes of Denel still have to meet certain conditions in order to access the funds."