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This report focuses on developments in State-Owned Corporations (SOCs), also known as State-Owned Enterprises (SOEs) between July 2010 and early November 2015. The Presidential Commission on SOCs reports that there are 512 SOCs involved in many economic sectors and situated countrywide. Whilst a consolidated estimate of the total asset base value of SOCs is not readily available, Transnet, South African Express, Eskom, Denel, the South African Forestry Company (SAFCOL) and Alexkor which all report directly to the Department of Public Enterprises (DPE), have an asset base value of R755bn. Government firmly believes that SOCs can play a crucial role in South Africa’s plans to increase economic growth and create employment.
Confronted by Problems
A number of proposed legislative changes are in response to the many and varied problems experienced by the country’s SOCs. A number of boards, including those of Eskom and the Land Bank, have not functioned well and in some cases, SOCs have been transferred from one department to another. The most notable of these is SAA, which has been moved from the DPE to the National Treasury. Many SOCs have been embroiled in corruption and financial mismanagement-related cases. This financial year the Petroleum, Oil and Gas Corporation of South Africa SOC Ltd (PETROSA) reported a loss of R14.6bn while the Public Protector found evidence of maladministration and financial mismanagement at the Passenger Rail Agency of South Africa (PRASA).
The report on South African SOCs focuses on the challenges faced by the state-owned entities, proposed legislation and possible measures to improve performance and stimulate economic growth. The report also profiles 12 of the major SOCs, including the Public Investment Corporation SOC Ltd (PIC), one of the largest investment managers in Africa, managing assets of over R1.8-trillion.