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Department of Public Enterprises director general Kgathatso Tlhakudi said the department s budget is preparing for a substantial decrease to its annual budget.
The strategic and financial management of SA s SOEs has long been a key weakness of government as parastatals currently sap financial resources from the fiscus.
He said, excluding payments for financial assets, compensation of employees was the department s largest cost driver.
Department of Public Enterprises (DPI) director general Kgathatso Tlhakudi said the department s budget is preparing for a substantial decrease to its annual budget.
Government is trying to cut costs and part of this process involves the PIC streamlining SA s troubled state-owned entities (SOEs).
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SA Express was placed under provisional liquidation in April 2020 after a failed business rescue process.
Plans to consolidate the airline with SAA became difficult due to both state-owned airlines running into trouble, Parliament hears.
The oversight model for SOEs such as SA Express needs to be looked at, the DPE told Parliament.
In 2016, the Department of Public Enterprises (DPE) put together a business model to outline how to consolidate South African Airways (SAA) and regional airline SA Express (SAX), according to Nonny Mashika, acting deputy director general for aviation at the DPE.
However, by 2018, both these state-owned airlines were experiencing severe problems.