Public Enterprises Minister Pravin Gordhan says the restructuring under way at South Africa’s troubled State-owned electricity producer will result in a new-look entity that “will no longer be the old Eskom as we know it” by the end of March next year.

Delivering his Budget Vote to lawmakers, Gordhan said the National Transmission Company of South Africa (NTC) would be fully operationalised by November and that the identities of its independent board members would be announced “shortly”.

The long-awaited separation of the NTC from Eskom’s generation and distribution divisions has been prioritised in light of the importance of such an entity in levelling the playing field between Eskom generation and independent power producers, even though it will initially remain a subsidiary of Eskom Holdings.

Progress has been stilted, and the November timeframe is a few months behind the mid-2023 aspiration outlined in April when an application was made to the National Energy Regulator of South Africa for Eskom’s national transmission, trading and import and export licences to be transferred to the NTC.

Gordhan also announced that the distribution subsidiary would be “corporatised” by the end of December, while a due diligence for the establishment of a generation company and a new holding company would be completed by the end of March.

“So, Eskom will no longer be the old Eskom as we know it by the time we get to the end of this financial year,” the Minister told lawmakers.

Gordhan said that similarly far-reaching restructuring was under way at freight logistics group Transnet and that a roadmap for the future of Transnet should be completed in the next three months.

“An optimisation of the implementation of private partnerships, both in rail and ports, [and] the overhaul of the freight rail infrastructure to recapture freight volumes are part of the objectives that Transnet is working towards.”

He also insisted that progress was being made on a new legislative framework for all South Africa’s State-owned enterprises (SOEs), many of which are in financial distress and have been shown to be hotbeds of corruption.

He said draft legislation for the future governance of SOEs was ready, while the business case for an overarching holding company for SOEs had also been completed.

The formation of the holding company had been proposed by the Presidential SOE Council set up in June 2020 and would draw in lessons from similar structures in countries such as Malaysia, China and Singapore.

Gordhan said the new holding company structure would seek to sustain the current separation between policy and operational functions, but could allow for a leveraging of the collective balance sheets of the entities.

“Of course, in the process, we have to overcome the legacy of State capture and to improve operational effectiveness.”