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As Eskom lurches from one day to the next in a state of turmoil, and other parastatals like Armscor and Transnet continue to experience similar predicaments in their management and operations, the clear picture that is emerging is that the ANC's ‘developmental state' is in crisis. Parastatals lie at the heart of the ANC's developmental state model, but the truth is that they are doing anything but helping South Africa's development. Indeed, parastatals like Eskom have become one of the most significant impediments to economic development, because the services they provide to South Africa continue to be antiquated, inefficient and expensive. Naledi Pandor could not be further from the truth when she says that the political intervention that kept Jacob Maroga on as Eskom CEO would not affect South Africa's image. Actually, there is already talk of a possible downgrade amongst credit rating agencies because of the turmoil in Eskom, which will increase the risk premium and therefore the cost of borrowing for the power utility - a cost that will filter down to taxpayers and electricity users. Worse still, there is the broader point, which seems to have been lost amid the pandemonium, which is that the ANC's intervention in Eskom, to keep Maroga on, illustrates precisely the reason why we face such serious problems in our parastatals in the first place: because the ANC refuses to allow parastatal boards to get on with the business of providing a service to South Africans. Instead, they treat parastatals as a playground for ANC cadres. In this context, the political protection afforded to Jacob Maroga is just the latest in a long line of instances of cadre deployment and protection from the ANC. This phenomenon has played a role in a large number of the leadership crises in our parastatals. In fact, few major parastatals in South Africa do not face such crises at the moment:
• At Transnet, no CEO has been in place since Maria Ramos left, and operations have been left in the hands of an acting chairman and Chief Financial Officer. At Transnet Freight, the CEO Siyabonga Gama has been on suspension following allegations of fraud.
• At the SABC, the entire board was removed for its failings, but was then replaced by an interim board filled with ANC cadres, even while the SABC received an R 200 million bailout in state money in the recent Medium Term Budget.
• At SAA, former CEO Khaya Ngqula was fired for alleged tender rigging to the tune of R 1 billion;
• At the Land Bank, the situation deteriorated to the point that government oversight had to be shifted to the National Treasury away from the Department of Agriculture - and they also received a R 1 billion bailout because of the severe losses suffered from its mismanagement.
• And at Armscor, CEO Sipho Thomo has been asked to resign by the chairperson of the board after being charged with a litany of failings - amongst them, the fact that he needed to undergo counselling for his management style, a disciplinary hearing in relation to a sexual harassment case which cost the taxpayer more than R1.8 million to resolve, and the fact that he prompted a virtual "revolt" by senior managers who accused him of creating a "general atmosphere of intimidation and victimisation".
Cumulatively, the extent of mismanagement and corruption at parastatals is costing South Africa billions of rands. In response to a parliamentary question posed by the DA, the National Treasury has stated that it gave R 200 billion in financial aid to parastatals in the 2008/09 financial year. In other words, parastatals, the very vanguards of the ANC's developmental state, are one of the central impediments to development because they are draining away state funds, ballooning the budget deficit, and reducing the amount available for things like service delivery.