The government poured some R282 billion into state-owned companies (SOCs) including Eskom and Transnet over the past five years but received only R1 million in dividends.
Public Enterprises Minister Pravin Gordhan (pictured) on 29 April provided a breakdown of how much the government has received in return from its investments in the SOCs. He was responding to a question by Democratic Alliance MP Farhat Essack.
Essack asked how much South African Airways (SAA), Eskom, Transnet, the South African Forestry Company Limited (SAFCOL), Alexkor, and Denel have received in bailouts and paid out in dividends since May 2019.
Gordhan said these entities did not receive any bailouts, but capital was invested in the SOCs to put them on a path of sustainability.
Of the six SOCs, only SAFCOL has returned a dividend. It is one of the two SOCs that have not received any assistance from the government.
Eskom has received R234.6bn over the past five years. Since May 2019, Eskom has received government support of R158.6bn through the Special Appropriation Act and R76bn, which includes R13bn expected to be received by the end of March 2024, in terms of the Eskom Debt Relief Act.
Gordhan said these amounts were not bailouts, “but government support is required to mitigate the fact that the allowed revenue under the NERSA Multi-Year Price Determination allowable revenue theory is understated”.
He quoted from the 2023 Budget Speech as follows:
“The National Treasury recognises that debt relief alone will not return the utility to financial sustainability. A key assumption considered in the debt-relief determination is the implementation of the recent tariff increase approved by the regulator (18.65% in 2023/24 and 12.74% in 2024/25). Without these increases, the debt-relief arrangement is not sustainable.
“Outstanding municipal debt, which has grown from R58.5bn in March 2023 to R74.5bn in February 2024 (11 months), is a systemic challenge to the electricity industry as a whole. The National Treasury is finalising a proposal to address this debt.”
Transnet received an equity injection of R5.8bn in February 2023 to accelerate the rehabilitation of locomotives (R2.9bn) and to cover losses/expenses incurred because of damage from the KwaZulu-Natal floods in April 2022 (R2.9bn), Gordhan said.
The table below summarises the bailouts paid to SOCs over the past five financial years and the dividends received.
