Finance Minister Tito Mboweni. FILE PHOTO: Nokuthula Mbatha/African News Agency (ANA) Finance Minister Tito Mboweni. FILE PHOTO: Nokuthula Mbatha/African News Agency (ANA)
PARLIAMENT - Finance Minister Tito Mboweni is making good on his promise that cash-strapped state-owned companies receiving bailouts from government would be placed under curatorship, announcing on Tuesday that chief restructuring officers would be appointed within 48 hours for Eskom, Denel, SABC and SAA.
Mboweni tabled a special appropriation bill in the National Assembly, making available R59 billion to Eskom over the next two years, but said that this would go hand in hand with a chief restructuring officer being appointed later in the day.
Chief restructuring officers would also be announced for state arms manufacturers Denel, the South African Broadcasting Corporation (SABC) and South African Airways (SAA) on Wednesday.
"Tomorrow we'd be announcing for each one of these entities, the relevant chief restructurng officers who will work together with the management of these institutions to get these institutions back on track," he said.
The SABC requested R3.2 billion, said Mboweni, but this would not be released in one go but in chunks "when certain conditions are met to make sure there's progress in improving the organisation".
During the Treasury budget vote on July 11, Mboweni announced he would allocate funding from the R13 billion contingency reserve to shore up SAA, SABC and Denel.
Denel last month ran out of money to pay its staff and only managed to do so after a lender came to the rescue. However, it was still not able to pay pension contributions for the month. The state arms company last year lost R1.7 billion.
According to National Treasury, SAA needs an additional R4 billion for the current financial year. Last year, it received a R5 billion lifeline to prevent it defaulting on debt repayments.
Mboweni on Tuesday said the R59 billion Eskom allocation would be split over two years. The utility would be allocated R26 billion this financial year and R33 billion in the 2020/2021 financial year. This was in addition to the R23 billion lifeline extended to the cash-strapped power utility in the February budget.
Mboweni also sounded the alarm, announcing that tax revenue collection was expected to fall far short of what was budgeted for in February.
"In addition to the financial support to Eskom there is also a preliminary indication that tax revenue could be significantly lower than budgeted for in the 2019/2020 budget," the minister said.
"This could substantially increase the government's borrowing requirement for 2019/2020 which will require government to revise its funding strategy and current weekly bond issuance at levels beyond what we had planned."