MEDIA STATEMENT JEFF RADEBE, MINISTER FOR PUBLIC ENTERPRISES, AND IVY MATSEPE-CASSABURI, MINISTER FOR POST, TELECOMMUNICATIONS AND BROADCASTING
16 July 1999
Ladies and Gentlemen of the Media,
We have called this morning's media conference to report on a number of decisions taken at yesterday's Inter Ministerial Cabinet Committee on the Restructuring of State Assets. I am happy that I have been joined by my colleague, Minister Ivy Matsepe-Cassaburi who will make certain announcements that fall directly under her portfolio.
At the outset, let me just repeat briefly how we as Government see the need to accelerate the restructuring of state owned enterprises. I think we are all agreed that state owned enterprises have a critically important role to play in the ongoing development of our country because they cover a wide range of areas that are essential to any programme of transformation driven by government. These include energy, transport and telecommunications networks. It is also common knowledge by now that government believes that the delivery of these services must be substantially efficient, cost effective and productive. Thus, government has adopted in principle a number of strategies that can be used to achieve these goals. These include inter alia the reorganisation of business management systems, degrees of privatisation that range from partial to complete privatisation, outsourcing of functions, the inclusion of strategic equity partners as well as strategic management partners.
The need to restructure state-owned enterprises is urgent not only so that we can eliminate the losses that afflict some of these enterprises, but also because we need to have streamlined instruments at our disposal to ensure the success of government economic development programme as a whole. Obviously, the nature of the restructuring depends on the extent to which we see these enterprises as strategic to state interests as a whole.
Let me turn to a few of the specific cases we dealt with yesterday. You will be familiar with the details of these projects, but if you have any queries about them, please feel free to contact my officials for more information.
AVENTURA
Following on the inability of Kopano to fulfil the terms of the original agreement with them for the purchase of Aventura, government decided to seek a management partner to turn around Aventura into a profitable entity before privatisation. Thus, an agreement has been reached that the Minister for Public Enterprises will provide a letter of undertaking for the existing and bridging bank facilities and the Government will provide a guarantee for Aventura. A sub-committee of Ministers will explore other options for the long-term resolution of the company's problem.
SAFCOL
The Inter-Ministerial Cabinet Committee agreed that deadline for the submission of bids be extended to 31st August 1999 at the request of all the bidders to complete the due dilligence and we also noted the progress made in the transaction to date.
SPOORNET
The Inter-Ministerial Cabinet Committee noted the report by Transnet management on the transformation and restructuring of Spoornet.
A sub-committee of Ministers comprising Public Enterprises, Transport, Labour, Finance, Trade and Industry and Minerals and Energy will consider a detailed report with the view of exploring issues such as the social plan, concessioning and other matters, and will report to the Cabinet in due course. Amongst other things, the sub-committee will be meeting labour and management in the course of next week to consider whatever proposals for the future of Spoornet they may have.
Bophuthatswana Broadcasting Corporation: Its Future
An agreement has been reached about the future of Bop Broadcasting after lengthy discussion between the SABC, Bop Broadcasting and the Development of Communication.
In just over a month, The Minister of Communications will call for proposals for a strategic management partner (SMP) for the Bophuthatswana Broadcasting Corporation.
The successful SMP will be a combination of local and international technical skills.
The objective of the strategic management partnership is to establish and maintain a world class broadcasting and business management standards at Bop Broadcasting.
Initially the agreement will be for the provision of management services for a fixed period subject to performance incentives.
Preparation of the "Request For Proposal" document has commenced and it is anticipated it will be available no later than 30th of August 1999.
At this stage let me hand you over to my colleague, Minister Matsepe-Cassaburi.
Selection of preferred bidder for Strategic Management Partnership with Postal Services
The Government has selected New Zealand Post International and Royal Mail (UK) as the preferred bidder for strategic equity partnership with the South African Post Office.
The selection of the preferred bidder is the result of a long and careful process, following a 1998 Government decision to seek a partner for the Post Office in order to extend services and help reposition the company.
The bid by New Zealand Post International and Royal Mail (UK) met the criteria set by the South African government most closely. This means that Government can now proceed with negotiations with the preferred bidder to establish their suitability as a strategic management partner.
Divestiture of 10% of Government Equity in Telkom SA Ltd The Inter-Ministerial Committee has reconfirmed its decision to divest 10% of Government's equity in Telkom to Telkom staff and for the purposes of black economic empowerment.
The following allocation was approved - 5% to the National Empowerment Fund, 3% to empowerment groupings, 2% to unions and Telkom staff.
Cabinet also approved the divestiture of 10% of Government's equity in Telkom SA Ltd.
Restructuring of the PostBank
The Inter-Ministerial Cabinet Committee has approved the corporatisation of the Postbank, currently a division of the South African Post Office Limited. The objectives for the restructuring of the Postbank include establishing a financial institution for mass mobilisation of savings and investment funds by making savings services through post offices; creating a bank of first choice for lower income groups, and contributing to household savings through the utilisation of the Post Office network.
We thank you.
Contact person:
Ministry for Public Enterprises: Zaid Nordien, 082-453-6224
Ministry for Post, Telecommunications and Broadcasting: Connie Molusi, 012-427-8000