Tuesday, January 26, 2010

R260 million paid to 'failed' parastatal CEOs

Ah, the noble tradition of rewarding incompetence. Why bother, when you can fail and still get paid?

Proof that parastatals exist to provide services to their bosses and not to the public.

Payouts to "failed" departing chief executives of South Africa's parastatals have cost the South African public at least R262.1 million over the last decade, a Democratic Alliance MP said on Tuesday.

Pieter van Dalen said the cost of the payouts would jump to R347 million if former Eskom chief executive Jacob Maroga was successful in a lawsuit against the parastatal.

"If paid out, Jacob Maroga's R85 million claim would be just the latest in a series of staggering salary payouts to unsuccessful executives," Van Dalen said.

"Since 2001, at least R262.1 million has been awarded to parastatal bosses for their part in running their respective parastatals to the ground."

These payouts include an R8 million settlement received by former SA Airways (SAA) chief executive Khaya Ngqula, after he was fired for his role in a R1 billion tender rigging saga in 2009.

Before Ngqula, SAA paid CEO Andre Viljoen R3.6 million on top of a salary of R2.2 million and a performance bonus of almost R1 million.

During Viljoen's last two years at the helm of SAA, the company made losses of R15 billion.

In 2001, former SAA CEO Coleman Andrews received a golden handshake of R232 million, even though the airline posted a net loss of more than R700 million for that year.

In 2009 the SABC paid R11 million to its former group CEO Dali Mpofu. Mpofu took the SABC to court after he was suspended for suspending then head of news and current affairs Snuki Zikalala.

Former Denel chief executive Victor Moche, who was fired from his position by then public enterprises minister Alec Erwin, walked away from the parastatal with a golden handshake of about R3 million in 2005.

Land Bank CEO Alan Mukoki received R4.5 million after he quit in 2007 amid R2 billion worth of fraud.

"This list, it should be noted, is limited only to payouts received by departing CEOs of parastatals.

"The culture of golden handshakes, however, extends far beyond that under the ANC. Recent examples of Lawrence Mushwana (R7 million) and Vusi Pikoli (R7.5 million) illustrate precisely that point."

Van Dalen said the party would pose questions to the Minister of Public Enterprises Barbara Hogan to establish the true cost of severance packages over the last few years.

"We cannot continue to pay for incompetence like this. This is money that could be spent on ensuring that parastatals deliver quality services to the public that they are required to." - Sapa

4 Opinion(s):

Haikutastic said...

Thought you might find this interesting:

http://www.youtube.com/watch?v=o1dZw6nItu4&feature=related

Dambisa Moyo is a very interesting person, an outspoken opponent of foreign Aid to Africa. Particularly illuminating about this debate is the attitude taken by development agencies towards Africa. On one hand they profess to care a great deal about alleviating poverty (same old tired line) , and then on the other are in fact furthering their own interests as an industry. Because, in fact if development agencies were doing their job properly, they'd be aiming to put themselves out work eventually? Don't see that happening anytime soon?
The only blind spot on the part of Dambisa (I think) is her belief in China. I think she's being naive. Otherwise, she comes across as very smart and astute and more importantly... honest.

Viking said...

Thanks for the link, I'll take a look now. She is very good, and so is Robert Calderisi, whose frustration with the aid industry managed to change IMF approach to Africa. Some of his ideas I used in this recent ILSA post:

http://iluvsa.blogspot.com/2010/01/africas-comparative-advantage-is.html

Aid has replaced trade, basically, since the 1950s, and the aid industry has snowballed to such an extent that it can legitimately be asked, why should Africans bother to produce anything?

Anonymous said...

Sooner or later all this corruption is going to catch up with the South African government. At the moment they are taking from the tax payer to launder money to their pals. What's going to happen when the ANC has other committments to pay (eg. the SWC debt) and can no longer afford to prop up their cronies who they owe?

white-southafrican said...

These arsehole belong in jail, doing hard time and hard labour to pay back what they owe society. Golden handshakes are just a way of taking white wealth and distributing it to balck hands or ANC people.