AS TALK of a sale of "non-strategic government assets" to strengthen Eskom’s balance sheet went into overdrive last week, I wondered whether the government was now looking to "sell the roof to pay the rent", to borrow a phrase used in the SACP in the 1990s.

Many of you will remember that the National Treasury issued a statement last month that read, in part: "An allocation of funding will be given to Eskom to help relieve the impact on electricity consumers, as well as add additional support to Eskom’s balance sheet, which needs to be strengthened. This will be funded from leveraging non-strategic government assets. Details in this regard will be provided by the minister of finance as part of budget announcements."

As the days passed after the statement, I opened my ears to hear if those who embrace the hammer and sickle would throw their toys out of the tripartite alliance cot over this looming privatisation. The silence was deafening. Why was I surprised when I have seen that some hammer and sickle fellows talk left and walk right in pursuit of the Rupert & Rothschild grapes served at restaurants in Johannesburg’s northern suburbs?

Media reports last week showed that family silver such as Telkom and the shareholding in Vodacom have been put on the table, and bankers hired to advise how these can be sold. There was also talk that holdings in listed companies under the management of the Industrial Development Corporation (IDC) could also be considered for sale. None of the media reports have been denied by the government so far.

About two years ago Telkom was considered a "strategic asset" when South Korea's KT Corporation wanted to buy it.

Perhaps in tough times what has in the past been considered strategic is now nonstrategic.

The government must ask itself if it is not taking a risk by selling dividend-yielding assets to plug a dark hole that keeps on getting deeper and darker. What happens if other dividend-yielding assets are sold and Eskom’s balance sheet remains broken?

Second, if the government sells some of its holdings to a private-sector player, it should remember that the buyer will have free rein to rationalise the assets, including cutting jobs. This could worsen SA’s unemployment headache.

The government should examine other options to fix Eskom without selling dividend-yielding assets that also pay taxes. What about privatising certain parts of Eskom? A colleague said this would lead to an increased cost of power, but the National Energy Regulator of SA is there to regulate electricity tariff increases. The counter argument to this is: who would invest in a power sector that is heavily regulated? Well, there are independent power producers that are investing in the regulated power sector.

The prices of petrol, paraffin and diesel are regulated and private companies remain invested in this sector.

Second, if the government sells some of its holdings to a private-sector player, it should remember that the buyer will have free rein to rationalise the assets, including cutting jobs. This could worsen SA’s unemployment headache.

Third, the government needs to think about the importance of strategic assets, perhaps in a similar manner to the National Party in the past. State-owned companies are key to producing talent and skills. These assets are also key to the transformation project.

I was fascinated to hear last week that FirstRand founders Pat Goss, Laurie Dippenaar and Paul Harris had worked for the IDC and how it had taught them a lot about the finance world and that this was like a "practical MBA" that partly helped them to create the banking group.

Dippenaar said that when they hired Sizwe Nxasana as FirstRand CEO, the fact that Nxasana had run a big company such as Telkom had given them comfort. In a nutshell, as SA pursues its transformation project, strategic state-owned companies remain key institutions that offer that "practical MBA", which more black people should be pursuing.

So what is to be done if push comes to shove and the government really has no room to manoeuvre?

As it looks to build black industrialists, it could sell some of what it considers "nonstrategic assets" to potential black industrialists who have the capacity to run corporations, rather than selling to a foreign player. These people could be ones who have worked in the same state-owned corporations.

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