Cosatu wants Pravin Gordhan’s department scrapped in Cyril’s cabinet shuffle

By Amogelang Mbatha

(Bloomberg) – South Africa’s biggest labour-union group wants state companies to be managed by various ministries and wants the Department of Public Enterprises scrapped when President Cyril Ramaphosa announces his new executive.

Such a step would do away with the department currently led by Public Enterprises Minister Pravin Gordhan, who has been at loggerheads with labour unions over pay and possible job cuts at the state power utility since he was appointed to the position last February.

The Congress of South African Trade Unions wants embattled state companies like Eskom Holdings SOC Ltd. to be run by the Energy Department while the state port and rail operator Transnet SOC Ltd., national carrier South African Airways and the Passenger Rail Agency of South Africa can fall under the Department of Transport, General Secretary Bheki Ntshalintshali said Thursday in an interview.

State-owned enterprises “should be aligned with the relevant departments,” he said. “We recognise that some of them are big and others are in a mess, but it does not justify that we need a standalone ministry.”

While the Presidency hasn’t given an official date, Ntshalintshali said the cabinet would be announced by May 27.

South Africa has more than 100 state-owned companies, most of which fall under Gordhan. Entities such as Eskom are strapped for cash and increasingly turning to the government for bailouts and debt guarantees, posing a risk to the nation’s finances. In recent years several state companies have been caught up in graft and mismanagement allegations linked to former President Jacob Zuma and his allies.

Smaller cabinet

Ramaphosa has the ruling African National Congress’ backing to shrink an executive that has grown to as many as 34 government departments under Zuma’s tenure. Cosatu also wants the president to trim the cabinet.

“The cabinet should be reduced to between 22 and 26 portfolios, because some were created” to deploy people loyal to the former president, Ntshalintshali said. “In some instances it can be gradually reduced to have a proper transition.”

While the president has the prerogative to choose his executive, he would typically consult with the ANC’s other top leaders and the party’s political allies, the South African Communist Party and Cosatu, who were key to Ramaphosa’s rise to the ruling party’s top spot.