Letter: Prescribed assets not the answer - Business Day

1 February 2019 - Until their performance inspires such confidence, SOEs will rightly be viewed with suspicion, and prescribed assets as a species of expropriation without compensation.

Post Office CEO Mark Barnes offers a beguiling endorsement of prescribed assets (How prescribed assets could actually be our saviours, January 29 ).

It was also less than convincing. To his credit, he acknowledged some conditions. They would need to be “handled properly, specifically by experts, under a proper mandate” and that “capital should be raised and managed into properly costed, specifically identified projects that will be professional managed, in an accountable way”.

But that is the problem. SA’s state-owned enterprises (SOEs) have not shown themselves to be so managed. If they were, it’s doubtful they would be in the state — financial and otherwise — that they find themselves; or that a perceived need for prescribed assets would have arisen. 

It is mind-boggling that Barnes dodges this: “Whether those mandates are being efficiently executed now or not is a separate matter — we’re arguing funding here, not management.” Even if we accept that shareholder returns must occupy a lower order of importance in SOEs, no rational case can be made for investing in them if they are not able to carry out those mandates. Funding and functionality cannot be separated.

Until their performance inspires such confidence, SOEs will rightly be viewed with suspicion, and prescribed assets as a species of expropriation without compensation.

For myself, I continue to await a registered parcel from abroad which has circulated lethargically through our postal service for four months, and — according to the Post Office website — now celebrates its 40th day in the Witspos Hub (its second sojourn there, after having been sent to an office in a different postal code). It hardly inspires confidence for the fate of one’s savings.

Terence Corrigan
Project manager, Institute of Race Relations

https://www.businesslive.co.za/bd/opinion/letters/2019-02-01-letter-prescribed-assets-not-the-answer/

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