Call for privatisation of loss-making assets

Mvelaphanda chairman Tokyo Sexwale has criticised government on the pace of privatisation, saying it was going “slowly” and questioned why government should hang onto South African Airways (SAA).

The fate of SAA should long ago have been decided, “especially since taxpayers have just paid R6bn for new engines for SAA”.

“I don’t think government should be involved in a loss-making airline,” Sexwale told a debate at the University of Cape Town recently.

Sexwale also asked whether SA needed armaments manufacturer Denel, which had recently requested a R5bn lifeline after reporting a R1,4bn loss, and whether it was still a strategic entity.

Sexwale said that no matter how well SA was perceived internationally at the level of President Mbeki, Reserve Bank governor Tito Mboweni and Finance Minister Trevor Manuel “who were doing a fine job on fiscal policies”, local government was a major danger area.

It had been disturbing to see during marches against the lack of service delivery how people were trashing their cities.

“People are getting increasingly uncomfortable and saying delivery, delivery … on the ground. I think that’s where this thing will catch us,” said Sexwale.

He said the ANC had made the mistake of deploying people to Parliament and Pretoria “but the best generals go to the worst front”.

Quick corrective action was required on service delivery to rectify the situation, “because that’s where the nation may face a crisis”.

Also speaking during the debate, former state president FW de Klerk said no-one could quarrel with the underlying goals of black empowerment but the question was how these ideals could best be achieved.

Experience taught that economic outcomes could not be determined by legislation or compulsion. More often the result of such attempts was the opposite of their authors’ intention.

Source: Chris Van Gass Call for privatisation of loss making assets Business Day 25 October 2005

For text: http://www.businessday.co.za/articles/article.aspx?ID=BD4A105674

FMF Policy Bulletin/ 01 November 2005 - Policy Bulletin / 17 June 2009