Malatsi announces restructuring of entities in Communications Department

Fresh from seeking National Treasury’s support to pursue private partnership in the South African Post Office (Sapo), Communications and Digital technologies Minister Solly Malatsi has outlined plans to rationalise some of the 11 state-owned enterprises falling under his department.

This comes after DA MP Tsholofelo Bodlani asked in parliamentary question whether Malatsi’s department has put any plans in place to rationalise the entities reporting to him that have overlapping mandates.

Bodlani also enquired whether the department would pursue public-private partnerships to strengthen the performance of the entities, to lower the pressure on public finances.

In his response, Malatsi said the merger of Broadband Infraco and Sentech has been identified with the intention to form the State Digital Infrastructure Company.

“The business cases for the formation of the two entities were developed but implementation has been delayed due to changes in direction,” he said.

Malatsi also said plans are in place to rationalise the Universal Service and Access Agency of South Africa and the Universal Service and Access Fund into a challenge fund.

This would be called the Digital Development Challenge Fund.

“The department is currently busy with the legislative process in this regard,” he said.

However, Malatsi said: “Public-private partnerships have not been considered at this stage.”

The planned restructuring of the SOEs comes in the wake of Malatsi’s announcement earlier this month when he asked for the support of the National Treasury to pursue private partnerships for Sapo.

Malatsi asked the National Treasury to support the formation of a task team to investigate private financial and operations partners for Sapo.

This was to enable serious consideration of privatization scenarios.

“The goal is to modernize Sapo’s operations, drive innovation and increase its competitiveness.”

He had said it was clear that any allocation of previously committed funds to Sapo, which is under business rescue, would be based on a revised business plan by the business rescue practitioners that met the National Treasury's expectations and worked to ensure there was accountability for failure to meet previous conditions that were imposed for the financial support Sapo received.

“It is with the goal of innovation and a competitive Post Office that it would be strategic to look into its current exclusive licence on reserved postal services.

“The focus is on fostering an open, competitive environment that promotes innovation and service excellence.”

His proposal has been criticised by Cosatu, which said it was vehemently opposed to calls to privatise or liquidate the Sapo.

Cape Times

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