New proposals on Transnet's huge deficits
THE government has tabled yet another proposal on how to deal with Transnet's massive R10-billion pension and medical aid deficit, writes SVEN LUNSCHE.
However, an interministerial government committee meeting on Thursday also gave backing in principle to the privatisation of Transnet's loss-making PX subsidiary and the split of Portnet into regulatory and operational functions.
In terms of Transnet's vast deficit, the Department of Finance tabled a proposal seeking "to limit the impact of the Transnet deficit on government budget targets", says Public Enterprises Minister Stella Sigcau.
Transnet, on the other hand, has proposed the establishment of a special purpose financing vehicle to house part of the deficit as well as other debts and assets.
Both Sigcau and Transnet consultant Kennedy Memane denied the proposals would delay the 49% sale of SAA this year. The cabinet backed the sale of SAA and Autonet last year.
The next step in the SAA privatisation will see Transnet executives going overseas this week to meet bankers to discuss the future of Transnet's estimated R8-billion foreign loans - the majority of these are linked to SAA assets. The bankers need to approve the proposed special purpose vehicle as it represents a material change in the loan conditions.
The meeting also dealt with the future structure of Denel, which has recently been in the news for management dissatisfaction with the slow pace of privatisation at its IT arm Ariel. Sigcau said she would not like to see Ariel sold outright while Denel is still completing its restructuring.
"But it would also not make sense to retain 100% of the group." Infoplan, a potential core for a government IT company, has been separated from Ariel, she added.
She said Denel would soon table its own masterplan, identifying its core businesses. "Non-core operations could then possibly be sold."
On whether Eskom should pay taxes and dividends - a foregone conclusion, according to analysts - Sigcau was confident that recognition would be given to the utility for its electrification programme.
This suggests the establishment of a separate fund to finance the electrification plan.