The Democratic Alliance (DA) in Limpopo will scrutinise the province’s State-Owned Entities (SOEs) when they appear before SCOPA this week, following the Auditor-General’s red-flagging of serious audit failures that undermine economic development and the wellbeing of our communities.
Although some overall audit improvement was noted in 2024/25, most provincial SOEs remain in distress. For more than a decade, key entities – including LEDA, RAL, GNT, MMSEZ, GAAL, and New Era – have been flagged for weak governance, financial risk, reliance on bailouts, and failure to deliver on their mandates, with direct consequences for Limpopo’s economy.
In the province, SOEs have come to expect rescue rather than accountability. Financial distress is routinely addressed through bailouts instead of reform, while oversight findings and calls for consequence management by Provincial Treasury, the Auditor-General, and SCOPA are repeatedly ignored. This indicates structural governance failure underpinned by insufficient political will to act.
The problem is recurring. Governance failures follow a predictable cycle: politically influenced board appointments, high turnover of CEOs and CFOs, and boards that fail to enforce PFMA compliance, consequence management, or remedial action. Interventions are often limited, with executives or board members reassigned rather than removed.
As a result, Limpopo’s SOEs consistently fail to deliver on their developmental mandates. Budgets are spent, but outcomes remain weak and largely invisible to communities.
Specific examples include:
- LEDA: Questions persist about value for money, failed industrial projects, weak investment facilitation, and insufficient oversight of the MMSEZ, Limpopo’s once-flagship industrial development initiative.
- RAL: Despite substantial capital allocations, roads continue to collapse, disrupting key transport and logistics routes, with some roads handed over to SANRAL for repair.
- GNT: The bus fleet has dramatically declined from 540 buses across 200 routes to just 23 operational buses in 2024/25, leaving thousands stranded despite repeated bailouts. Irregular expenditure was reported at approximately R675 million in the 2024/25 Auditor-General report.
- MMSEZ: More than R100 million has been spent and over R500 million contractually committed, yet the project has not delivered direct jobs over 16 years.
- GAAL: Polokwane International Airport has been largely non-operational following collapse of air traffic systems and requires further funding to stabilise operations.
- New Era: Its licence to trade has been revoked by the Reserve Bank’s Prudential Authority, reflecting governance failures similar to the VBS Bank case.
These SOEs were intended to be engines of development. Instead, they continue to drain provincial resources, undermining growth, job creation, and productive investment.
The root cause lies in weak governance under boards appointed by the ANC-led provincial administration, compounded by insufficient oversight from the Provincial Executive. Meanwhile, ordinary citizens continue to bear the cost through stagnant growth and limited public services.
The DA will ensure that both SOEs and the Provincial Executive are held accountable. We will continue to advocate for:
- Strong, independent boards
- Transparent governance and financial management
- Effective PFMA compliance
- Consequence management for underperformance
- Realignment of SOEs to deliver meaningful outcomes for communities
Only through decisive reform can Limpopo’s SOEs fulfil their mandates and contribute to economic development, job creation, and public trust in government.