National Treasury says Eskom, Transnet have prevented economy growth

Cape Town — National Treasury (NT) has said the poor performances of state-owned enterprises, Transet and Eskom, has had a devastating impact on the growth of the economy.

It is alleged that Transnet cost the economy R411 billion last year, while Electricity Minister, Kgotsientsho Ramokgopa, revealed that stage 6 load shedding was costing the country up to R1 billion per day, IOL reported.

Eskom has been implementing various stages of load shedding this year, and this year, set aside R30billion to burn on diesel, in a bid to keep generators running. Ramokgopa also added that they needed R400b to expand transmission lines.

NT Director General, Duncan Pieterse, told the joint committee in Parliament that if network industries jacked up their performance, this would lead to economic growth. But poor performance by Transnet and Eskom led to low growth this year.

“The main challenge that underpins the unsustainability of our debt position is our very low growth. In the Medium-Term Budget Policy Statement, we acknowledge the role that the energy and logistics sectors, and Eskom and Transnet in particular, have played in these very poor growth outcomes,” Pieterse said.

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Deputy Director General, Edgar Sishi, agreed with Pieterse that Eskom and Transnet were factors in the economy’s lack of growth.

“We note various comments about how we think about the growth challenges in the country. As the director-general indicated, the core problem is growth. Growth is related to falling electricity supply and logistics challenges,” Sishi said.

He added that reforms needed to be implemented that would be critical to economic growth and economic stability. He also said there were plans in place to get the rail network fixed.

According to EWN, Treasury said it was considering the immediate financial problems that Transnet faces, as well as the development and implementation of a plan that will deal with the company’s structural inefficiencies.

“Our work together with the national logistics crisis committee, which we are a member of, is to ensure that Transnet’s corporate plan is aligned with the work we are doing in the NLCC – we do anticipate that this will take a few months,” Treasury director for sectoral oversight, Phatu Rasivhetshele, said.