HR Pulse

For reasons of security, Pravin Gordhan says no to state offloading bankrupt Denel

Department of Public Enterprises (DPE) Minister Pravin Gordhan has ruled out offloading Denel, the broke state-owned arms manufacturer that is on the brink of collapse and is struggling to pay salaries.

Denel, which is one of the many parastatals struggling to recover from state capture, has recorded huge losses in recent years and owes staff R650m in outstanding salaries and suppliers R900m. This has led to calls from opposition parties and other stakeholders for the state to privatise the entity.

In a written reply to questions by the EFF published in parliament at the weekend, Gordhan said Denel was a strategic national asset that was interlinked with sovereign security, suggesting it should always be under some form of state control for security reasons. “The government is therefore seized with the primary responsibility to preserve the critical defence industrial capabilities that reside in Denel,” Gordhan stated. He said that while the ongoing financial challenges required, among others, a strategic review and repositioning of the company, “selling a stake at a Denel level is not among the current considerations”.

But, the minister added: “However, options under considerations include strategic equity partnerships in carefully selected business units and strategic partnership, such as joint ventures at capability and product levels.” The crises at Denel and other entities have put the government under pressure to show its intent on the restructuring of SOEs and reducing the financial burden on the fiscus.

To read the full report click here.

Source: SA Labour News