South Africa: Towards the establishment of a holding company grouping the various State companies
The South African Ministry of Public Enterprises has published a bill providing for the creation of a holding company bringing together the various state companies such as the struggling electricity company Eskom Holdings and the railway and port operator Transnet.
The bill, entitled «National State Enterprises Bill», stipulates the establishment of an asset management company called «State Asset Management SOC Ltd» which will consolidate the Crown’s holdings in a single entity.
The Ministry of Public Enterprises, which currently oversees the state’s holdings in dozens of companies, will be abolished after the official launch of the holding.
Several large South African public companies have been running deficits and burdened with debt for several years, mainly due to mismanagement and corruption. Thus, the inability of the national electricity company Eskom to meet demand, with its aging coal plants and inadequate new generation capacity, has plunged South Africa into a serious energy crisis that is undermining the country’s economic growth.
Similarly, the inability of the logistics group Transnet to operate the railways and ports it manages at full capacity prevents mining companies operating in the country from effectively meeting global demand.
This is the only way for the South African government to revive the national economy.
