The bill, open for public comment until February 14, lists 13 SOEs to be transferred as subsidiaries, including Eskom, Transnet, and Denel. Photo: File
Banele Ginindza
The proposed National State Enterprise (NSE) Bill, released for public comment on Friday, has drawn sharp criticism for potentially paving the way for State Capture 2.0. Critics from corporate, economic, labour, and academic sectors argue that the bill is ambiguous in its objectives, could facilitate the sale of state-owned enterprises (SOEs), and fails to improve the current state of affairs.
Published in the Government Gazette, the bill aims to consolidate all SOEs into a single holding company under the newly established State Asset Management (Samsoc), a state-owned limited company.
The bill, open for public comment until February 14, lists 13 SOEs to be transferred as subsidiaries, including Eskom, Transnet, and Denel. It also proposes that the government will remain the sole shareholder and allows for the transfer of land between SOEs with minimal cost and regulation.
This is what experts had to say:
OUTA CEO Wayne Duvenage:
“There are over 700 SOEs, many of which are subsidiaries within larger entities and government departments,” said Duvenage. “The first question is: which SOEs will be incorporated into Samsoc, and what criteria will be used?
"We don’t believe Samsoc will improve SOE performance. Instead, it risks adding confusion and increasing political interference. Concentrating so much power in the hands of one president—who can appoint board members at will—is a major concern for OUTA.
"The bill also lacks clarity on whether the Public Finance Management Act (PFMA) supersedes the Companies Act regarding governance transgressions. We believe the government should sell off businesses operating in highly competitive sectors, such as airlines (SAA), armaments (Denel), and mining (Alexkor). OUTA will submit detailed comments after further analysis.”
Claude de Baissac, CEO of Eunomix:
De Baissac criticised the bill for reducing transparency and accountability.
“The exemption from PFMA controls eliminates mandatory reporting of irregular expenditure and removes procurement safeguards critical in detecting corruption. This effectively gives SOEs a blank check with public funds,” he said.
“The bill misdiagnoses the SOE crisis. The problem has never been too much oversight but the deliberate undermining of existing controls through political interference and corruption. This creates perfect conditions for State Capture 2.0.
"A better approach would include:
– Strengthening PFMA controls and Treasury oversight;
– Creating genuinely independent board appointments;
– Encouraging private sector participation to enhance efficiency and reduce political interference; and
– Implementing the Zondo Commission’s recommendations on SOE governance.
"Instead of learning from past failures, the bill risks repeating them.”
Cosatu Parliamentary spokesperson Matthew Parks:
“Cosatu is engaging on the NSE Bill at Nedlac,” Parks said. “We are concerned the government has simultaneously tabled it for processing in Parliament.
"At face value, the bill affirms SOEs as publicly owned enterprises and proposes an SOE shareholder council. However, Minister Maropene Ramakgopa’s claim that the bill allows for SOEs to be listed on the JSE and privatized is alarming. Nowhere in the bill is this explicitly stated, and we would oppose such a move.”
Brian Molefe, the former Eskom CEO:
“The purpose of Eskom is to provide uninterrupted electricity. Whether it falls under the Department of Public Enterprises, the Department of Energy, or a holding company, the operational challenges remain unaddressed. The bill does nothing to resolve load-shedding or Eskom’s R50 billion loss, nor does it improve efficiencies,” Molefe said.
Donald Mackay, director and founder of XA Global Trade Advisors
“The bill essentially rebrands the Department of Public Enterprises into a corporate entity. Unlike Singapore’s Temasek model, our SOEs lack a profit-driven, commercially managed structure. Without fixing management and accountability, this restructuring is unlikely to yield any results,” Mackay noted.
Professor Piet Croucamp, North-West University:
“SOEs are bleeding financially, with bailouts adding to national debt. Whether placed under one ministry or divided among several, the core issue of mismanagement and corruption persists. The government must focus on addressing these challenges,” Croucamp said.
Professor Sandile Siswana:
“This bill has been in development since 2009 but remains hindered by conflicts of interest. It grants unchecked powers to the president, allowing appointments without clear criteria, and fails to harmonise with existing laws like the PFMA or Companies Act. The emphasis should be on appointing qualified, ethical leadership and learning from successful international models like those in Singapore and Scandinavia,” Siswana said.
Zwelinzima Vavi, the president of South African Federation of Trade Unions (Saftu):
“Saftu opposes the bill as it promotes privatization and public-private partnerships. We advocate for developmental state ownership that prioritizes accountability and public benefit,” Vavi said.
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