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The National Treasury has revealed that the SABC, the South African Airports Company Limited (ACSA) and the South African Post Office have asked for billions in financial aid from it.
The National Treasury informed Parliament on Tuesday and said Denel is at risk of being subjected to a bailout or business liquidation.
Denel posted a loss of R1.7 billion for the 2019/20 financial year, which was attributed to a significant decrease in revenue.
EWN reported that Denel is struggling to pay wages and is forecast to have a “negative capital position of R3.3 billion as of March this year.”
During its session in Parliament, the National Treasury also revealed that:
- The SABC was seeking R1.5 billion in financial support.
- The SA Post Office wants R4.9 billion to help it overcome the COVID-19 pandemic.
- Airports Company of South Africa Limited (ACSA) had requested a capital injection of 3.5 billion rand.
This financial support follows the bailouts of SABC and SA post offices that have amounted to billions in recent years.
Taxpayers are already under pressure due to the weak economy and increased public spending, but things will get even more difficult.
Eskom plans to significantly increase electricity prices despite job losses and widespread wage cuts in the country.
Eskom spokesperson Sikonathi Mantshantsha admitted that reducing the burden is one of the factors that led to the reduction of jobs in South Africa.
However, he said, they need to invest in infrastructure to change the company and avoid loss of cargo in the future.
He said that the reality is that this investment has to be paid for, that is why it is necessary to raise the price of electricity.
MyBroadband asked Eskom how it is possible to measure whether the energy company is wasting money or improving utility, but did not provide an answer.
Billions wasted on bailouts
In February, National Treasure revealed which has allocated R162 billion to state companies in financial difficulties.
Of the total allocations, Eskom represents 82%. In 2019/20, the government allocated R49 billion to Eskom and committed R112 billion in medium-term financing.
If one looks at what is planned until 2023, the allocation jumps to R291.2 billion.
The following table provides a summary of historical SOEs recapitalizations and bailouts since 2008.
Now Read: SAA Seeks R21 Billion Bailout From Government
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