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Masualle: Struggling SOEs Worse Off Due To COVID-19

State-owned companies that were struggling before the lockdown to curb the spread of the coronavirus are now in more trouble, parliament has been told.

Deputy Public Enterprises minister Phumulo Masualle said Eskom’s financial position is weaker due to loss of revenue as businesses, municipalities and households battle to pay their bills.

But Masualle said other state-owned entities like Transnet and Denel have also suffered as a result of the lockdown, with South African Airways (SAA) and SA Express hardest hit.
The deputy minister reminded Parliament’s public enterprise committee on Wednesday that several state-owned companies were already in dire financial straits before the COVID-19 pandemic hit. Now they’re even worse off than they were.

“We were dealing with an economy in decline, with SOEs that were experiencing difficulties – the COVID scenario has actually worsened the situation.”

Masualle singled out Eskom: “The reality is that the financial position has somewhat weakened, in that there’s been a loss of revenue, companies closing down, individuals having difficulties paying, and I know some of the municipalities continue to have difficulties to pay Eskom – all of that has impacted on the ability of Eskom to raise the required revenues.”

He said Transnet’s been impacted by less cargo moving in and out of the ports.SA Express is in provisional liquidation, SAA awaits a rescue plan and arms-maker Denel says it cannot pay staff salaries this month end.