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Cosatu wants Gordhan’s department scrapped

The labour union says parastatals should be aligned with the relevant departments, instead of being in a standalone ministry.

South Africa’s biggest labour-union group wants state companies to be managed by various ministries and wants the Department of Public Enterprises scrapped when President Cyril Ramaphosa announces his new executive.

Such a step would do away with the department currently led by public enterprises minister Pravin Gordhan, who has been at loggerheads with labour unions over pay and possible job cuts at the state power utility since he was appointed to the position last February.

The Congress of South African Trade Unions (Cosatu)wants embattled state companies like Eskom to be run by the Energy Department while the state port and rail operator Transnet, national carrier South African Airways and the Passenger Rail Agency of South Africa can fall under the Department of Transport, General Secretary Bheki Ntshalintshali said Thursday in an interview.

State-owned enterprises “should be aligned with the relevant departments,” he said. “We recognise that some of them are big and others are in a mess, but it does not justify that we need a standalone ministry.”

While the Presidency hasn’t given an official date, Ntshalintshali said the cabinet would be announced by May 27.

South Africa has more than 100 state-owned companies, most of which fall under Gordhan. Entities such as Eskom are strapped for cash and increasingly turning to the government for bailouts and debt guarantees, posing a risk to the nation’s finances. In recent years several state companies have been caught up in graft and mismanagement allegations linked to former President Jacob Zuma and his allies.

Smaller cabinet

Ramaphosa has the ruling African National Congress’ backing to shrink an executive that has grown to many as 34 government departments under Zuma’s tenure. Cosatu also wants the president to trim the cabinet.

“The cabinet should be reduced to between 22 and 26 portfolios, because some were created” to deploy people loyal to the former president, Ntshalintshali said. “In some instances it can be gradually reduced to have a proper transition.”

While the president has the prerogative to choose his executive, he would typically consult with the ANC’s other top leaders and the party’s political allies, the South African Communist Party and Cosatu, who were key to Ramaphosa’s rise to the ruling party’s top spot.

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I will probably be shot down for this but I agree (that functionally specialist ministries look after functionally specialist SOE).

Take energy (coal, fuel, Eskom). It makes a lot of sense that a government DG that has viability into Eskom, CEF and state coal and gas assets looks after the situation. That way we avoid former hair solan owner getting contract to supply diesel to Eskom.

I can’t shoot you down. You may have a point. From my perspective we do not need SOEs at all. So, we do not need a special department for SOEs where one clueless cadre has supervision powers over another. The centralization of decision making is a critical design flaw at the hart of the economy. We need to decentralise decision making in order to reduce the risks.

When the risks of bad decisions are concentrated in Luthuli House, the system is fragile and unstable. One bad decision has a huge impact on the economy and on the lives of people. We need to spread the risks by decentralising decision making among many entrepreneurs who have skin in the game. This will create a more robust system with many small errors that do not hold a risk to the entire economy.

Government is too big a player in our economy. In fact, government is such a large player that there is no place left for entrepreneurs.

Agree completely; this was my slant when querying why SOE’s should make a profit. They shouldn’t exist. Equal, private, competitive is the only answer I see. Nothing in sight means disaster for money SA.

In an ideal world there would be no SOE, but in most countries there are things that are owned and run by the state.

Utilities are obvious – things where economics dictate that there should be a monopoly. How would two more companies try and do potable water for example? And if there is one, then imagine the scope for gouging.

But when the state has established national assets like Sasol, Eskom, Transnet, CEF, Iscor, SAA it must eventually get out of the way or let technocrats run it rather than policy people.

Goverments role is to create an environment for society to exist and flourish. That’s all that they should be responsible for, everything else the free market.

Do away with political parties and their businesses then we will see real change.

Agree, reduce the number of Ministries AND reduce the number of Provinces. Consider the costs of running nine provinces, each having their own MPL’s, duplicating responsibilities nine times!?
Huge waste of money and resources.

Most want Cosatu, who do not have the spine to stand in elections on its own, scrapped.

Bunch of useless individuals.

“We recognise that some of them are big and others are in a mess, but it does not justify that we need [them].” Wise observation which applies equally to most governments and most SA government ministries and SA Unions …

Why does COSATU let the government privatised all these department and get rid off the Department,.once privatised,then it bloated and COSATU highly paid member ,will be monitored by productivity,and over 50% will get the chop.By breaking them and relocating them to t compliant ministry,will result in more cadre deployment,in efficiency.
come on COSATU,let privatise,and then you will see how quickly these companies become profitable.

Cosatu may have a point.

Does anyone know what happened to the former minister of SOEs, Lynne Brown? Is she at Luthuli House now? Or did she subsequently join the EFF or another party?

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