Reduction of state dependency, conflicted board members and an inability to compete effectively are some of the strategies applied and challenges faced by leaders of three State Owned Companies (SOCs).
Chief Executive Officers of the Post Office, South African Airways (SAA) and Airports Company of South Africa shared experiences in panel discussion organised by Deloitte.
Badly managed, bleeding cash and brazen corruption, this is the narrative associated with State Owned Companies.
Post Office CEO Mark Barnes says part of his strategy is to stabilise the postal services so as to create state assets and reduce state dependency.
Barnes says private sector practices can be applied at public companies without privatising them.
The Airports Company of South Africa is one of the few SOC’s that have been profitable with the least help from government. Its Chief Bongiwe Mbomvu pointed out that state companies often struggle with board members who struggle with fulfilling their fiduciary duties.
SAA’s Chief Executive, Vuyani Jarana assured the audience that he is prioritising getting the airline out of a loss making streak.
SAA has not posted profit since 2012 and has already sucked up over R57 billion of taxpayer’s money over the past 20 years.
Jarana blames Public Finance Management Act as one of the hindrances to being competitive in the open skies market.
With the public purse so constrained and finances tight, National Treasury emphasised the need to find creative ways of helping ailing State Owned Companies.
The Chief director of SOE’s Oversight at National Treasury, Ravesh Rajlal says this includes looking at private sector participation as opposed to outright privatisation.
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