We will have a debate later on, and a friendly one; do not worry. All the way, I fundamentally disagree.
Such investments, yes, governments invest not only spend and have proved transformative, creating entirely new markets and sectors, including the internet, nanotechnology, biotechnology and clean energy. In other words, the state has been key to creating and shaping markets, not just fixing them. This describes our situation as well, as I said. These are the opportunities that we have.
Deputy Speaker, a year ago, our major SOEs were decimated and found themselves in all sorts of difficulties because of malfeasance that enabled state capture and rampant corruption. Some of the indicators of this malfunction that resulted was the victimisation of ethical black leaders and professionals; operational decline and indiscipline; financial crises characterised by a mismatch between revenue and costs; a shortage of liquidity and high debt in many cases; deliberate mismanagement to facilitate corruption; negligible board and
executive fiduciary accountability and collusion with corrupt activities as well and many are unable to trade their way out of their difficulties.
However, over the past 16 months our work with respect to restoring good governance, stabilising operations, appointing new boards and directly confronting corruption proceeded with efficiency, speed and purpose, although we admit that there is much to do.
At the same time we can find both joy and encouragement from the passion, commitment and excellence among the thousands, if not the hundred of thousands of South Africans who really make these entities work - the ordinary workers, operators, engineers, technicians on the floor itself. Those are the people who drive the locomotives, who design and operate the wagons, who make our power stations work, who maintain the equipments in all of these SOEs and there are also the other crews working at the airlines which you want to shut down - SAA and SA Express.
Join me as I applaud the ordinary workers in these enterprises, ladies and gentlemen. The Presidential SOE Council as you pointed out, Mr President, will take on the formidable but important task of repositioning and reforming our SOE sector. The council will align SOEs to the national priorities and goals, decide which SOEs are strategic and which new SOEs to establish, for example. The council will advance the Fourth Industrial Revolution, reform procurement by SOE's to reduce the likelihood of corruption and review the business models, capital structure and sources of financing amongst other elements of the SOEs as well.
More specifically in the period ahead, we will ensure that we promote greater transparency and accountability to overcome poor governance; restore financial sustainability and prudence and create an environment in which - as you pointed out - skilled and professional public servants of the highest moral standards dedicated to the public good can thrive and contribute to a best in world culture; remove all vestiges of state capture and ensure there are harsh consequences for malfeasance.
Let me give you some examples of changes that are happening in various sectors of the economy which impact upon our SOEs as well. The energy sector is moving in a direction where there is a new balance emerging between fossil fuels and renewables. In terms of the logistics, new challenges and opportunities are emerging for increased regional trade from the African Continental Free Trade Area Agreement.
In aviation there are new designs emerging, virtually every month of different types of fuel efficient aircraft, its consolidation of airlines and low cost airlines which are competing for long haul flights. As far as the environment is concerned, the questions that we have with regard to our challenges is how we can reduce our dependence on nonrenewable sources of energy and carbon emissions and how we can introduce new carbon capture and battery technology in our situation.
As far as SA Airways, SAA, is concerned, we have to be frank with you and the South African public that it is in a precarious financial position. The airline has persistently incurred losses
over the past 12 years due to mismanagement, state capture and inability to service its debt.
During the past period we have been working on a new investment case, if you can call it that, for SAA, in order that we prepare the airline for a partnership with strategic equity partner. So, when our colleague on my left talk about shutting down SAA, they should tell the 11 000 people who work at SAA how their future is going to be. They want to put them on the streets, at the moment.
That is the case with Denel - you might have seen news headlines this morning that Denel can only pay 85% of staff salaries for June, due to liquidity constraints. However, later during the day, the latest update is that a lender has come to the assistance of Denel and full salaries will now be paid to all of the staff at Denel. There is no clearer example of the damaging effects of state capture than the financial strain and uncertainty the 3 500 Denel employees and their families may face each month as a consequence of what we have actually seen.
Let me come to Eskom more directly. The President said last week and I quote:
One reason for the country's lacklustre economic performance has been load shedding early this year, together with the continued uncertainty in the supply of electricity and the state of Eskom. The lesson is clear that for growth we need a reliable and sustainable supply of electricity.
I will elaborate on some of these issues that Eskom confronted. Today Eskom has successfully managed the system in terms of its "winter plan", for 94 days without load shedding and hopefully that will continue. A new head of generation business has been appointed last week, Mr Bheki Nxumalo. Of Eskom's 15 coal-fired power stations, 10 now have permanent power station managers with full authority, much greater than they have had actually before. Soon, the Minister of Finance will be able to announce the appointment of a chief restructuring officer following further consultations in government to focus on the financial challenges that Eskom faces. The Eskom board will also address
some of the challenges within the generation side and ensure that more operational and engineering staff is employed at power stations themselves and outages are actually reduced.
In terms of Eskom restructuring, good progress has been made in relation to working out the road map to implement the proposals in the February 2019 state of the nation address to separate its generation, transmission and distribution functions into three separate business entities, wholly owned by the State. There is no deviation from this strategic path. Eskom's separation will provide a number of other benefits, including greater transparency of financial and operational performance in each of its entity.
Some of the details being looked into currently are power transfer policies and contracts, internal structural reorganisation, financial reporting and auditing processes for each business, the detailed creation of cost allocations and service level agreements and the implementation of auditable financial statements amongst other elements. Engagements with organised labour have taken place in the past at the more
general level and they will now take place at the more specific level.
As I round up, what will be different in the sixth administration is that we shall exercise our shareholder oversight drill with increased vigour and we will require the board to do the same. We will ensure that the quality and the composition of our boards is appropriate to the tasks that they face and several boards have vacancies that we will fill. We will monitor performance of each of the SOEs more closely and ... [Time expired.] I hope you will give me a minute extra for the disturbance I had earlier on.