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The Portfolio Committee on Planning, Monitoring and Evaluation invites you to comment on the National State Enterprises Bill
The Bill aims to establish the State Asset Management SOC Ltd (SAMSOC), a holding company that will oversee strategic SOEs. SAMSOC will be 100% state-owned and tasked with providing coordinated oversight and monitoring of performance for all subsidiary companies.
Have your say – shape the Bill.
Committee on Planning Briefed on National State Enterprises Bill
The Portfolio Committee on Planning, Monitoring and Evaluation was briefed by the Department of Planning, Monitoring and Evaluation (DPME) on the National State Enterprises Bill.
The Bill aims to establish the State Asset Management SOC Ltd (SAMSOC), a holding company that will oversee strategic SOEs. SAMSOC will be 100% state-owned and tasked with providing coordinated oversight and monitoring of performance for all subsidiary companies. This model will separate the State’s ownership functions from policy-making and regulatory roles, minimising conflicts of interest and promoting coherent corporate governance standards.
The committee recognises the vital role that State-Owned Enterprises (SOEs) play in driving economic growth and providing essential services such as electricity, transport, water, and telecommunications. The committee was of the view that operational, financial, and governance challenges faced by these entities, exacerbated by issues of state capture and corruption, have significantly hindered their effectiveness.
The Bill emphasises the importance of governance and accountability mechanisms to ensure the professionalisation and integrity of SAMSOC and its subsidiaries. Members of the committee raised concerns regarding the composition of the boards for SOEs, particularly about the inclusion of executive members in the selection panels.
Some members of the committee indicated the potential for political bias and the undermining of independence were critical points of contention. In response, the DPME assured the committee that the selection process would prioritise competence and experience, with a commitment to reducing political interference.
The role of Parliament in overseeing the SOEs was another focus in the question and answers. The committee expressed the need for clearly defined guidelines regarding Parliament’s authority to hold entities accountable. The DPME told the committee that the legislation would include provisions for regular reporting to Parliament, enabling ongoing scrutiny of SOE performance and decision-making processes.
Concerns about the implications of the draft legislation on the Public Finance Management Act (PFMA) were highlighted. The committee highlighted the potential risks of financial mismanagement. In response, the DPME clarified that essential PFMA principles would be retained within the new framework, ensuring that SOEs operate within established financial accountability guidelines.
The involvement of the Presidency in the governance of SOEs sparked discussions about the balance of power and the potential for undue influence. The DPME said that while the Presidency would have a significant role in appointments and oversight, the legislation would safeguard the independence of SOE boards, with a focus on merit-based appointments.