No Bailouts For Struggling Parastatals Such As Eskom, Transnet, Treasury Insists

The treasury will not provide bailouts to struggling state-owned enterprises in the 2025 budget and will instead focus on improving governance at these entities, it reiterated on Wednesday.

Public and state-owned entities, including Transnet and Eskom , have posed a major risk to South Africas fiscal position, the treasury said in its 2025 budget review tabled in parliament by Finance Minister Enoch Godongwana, noting that most of the countrys contingent liabilities emanate from them.

For over a decade, most state-owned companies have not met the legal requirements to maintain sustainable profitability, manage risks effectively and generate returns while ensuring prudent use of public resources, the treasury said.

Various initiatives, including turnaround plans agreed with government, are under way, but progress has been mixed. Notably, Eskom and Transnet are implementing recovery plans agreed to during 2023/24.

Transnet posted a loss of R7.3 billion for the 2023-24 financial year worse than the loss of R5.7 billion in the prior year largely due to increased finance costs, while additional debt and higher interest rates pushed finance costs to R14.3 billion in 2023-24, placing further strain on cash flows, according to the review.