Latest news with #SOE
Yahoo
a day ago
- Business
- Yahoo
China will merge CSSC and CSIC to create shipbuilding giant
China has merged two of its giant state-owned shipbuilding firms to create an RMB 700 billion ($97.4b) company. China State Shipbuilding Corporation (CSSC) and China Shipbuilding Industry Corporation (CSIC) had previously been one state-owned enterprise (SOE), but were split in 1999. After months of discussions and rumours, the firms were again made one in a ceremony in Shanghai. The new CSSC will control as much as 21% of the global shipbuilding industry, and Beijing hopes the new megacompany will be a more efficient challenger across the civil, military, and offshore energy sectors. As competition is likely as fierce as it has ever been in the Asian shipbuilding market, the aim of this merger is to cement China's place above South Korea as the dominant force in the region. Over the 25 years the shipbuilders have been split into the northern Dalian-based CISC and the southern Shanghai-based CSSC, a domestic rivalry developed, according to China Decoded. Reducing this internal competition and focusing on growth compared to international rivals is increasingly vital for the Chinese industry as the US has become more assertive in anti-China policies during the second Trump administration. 'This merger marks the largest strategic restructuring in China's shipbuilding history, aimed at optimising resource allocation and enhancing competitiveness in the global market,' said Xu Yi, an analyst at Haitong Futures told South China Morning Post. It is understood that Tuesday 12 August will be the final day CSIC shares will be available for market trading on the Shanghai Stock Exchange, before the company is folded into China CSSC Holdings. The move has several potential downsides for the Beijing government and the new larger company. Firstly, it will almost certainly attract the ire of international anti-monopoly bodies. While these regulators do not have the power to break up the Chinese megafirms, they could recommend countermeasures to other governments which could restrict the business CSSC can do. The move could also consolidate military and civilian shipyards, which could lead to further international restrictions or tariffs aimed at the industry, such as increased port fees for Chinese vessels, or even higher tariffs. "China will merge CSSC and CSIC to create shipbuilding giant" was originally created and published by Ship Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Zawya
5 days ago
- Business
- Zawya
South Africa: Transnet's recovery, why institutional investors should be watching closely?
Transnet's turnaround signals a new era for South Africa's logistics and infrastructure investment. With reforms underway and fresh leadership in place, the SOE is regaining credibility and unlocking opportunities for long-term investors. For institutional lenders such as Ninety One, for example, it's been encouraging to see the recent developments at the Department of Transport and across the wider sector. After years of operational decline, Transnet is starting to show credible signs of a turnaround. That makes this a critical moment to reassess both risk and opportunity in relation to Transnet's debt and the broader logistics investment landscape. The crisis before the recovery: Why reform was inevitable Before the recent wave of reforms, Transnet was entrenched in a multi-dimensional crisis. Years of 'state capture' had hollowed out governance and procurement integrity, eroded institutional capacity, and left critical operational divisions vulnerable to mismanagement and corruption. This legacy severely undermined Transnet's ability to maintain and expand infrastructure or deliver reliable service to its customers. Its freight rail volumes were in freefall, driven by a sharp decline in operational locomotives, many idled due to a lack of critical spares and disputes with suppliers. Cable theft surged, with over 1,000 km stolen in FY23 alone, inflicting nearly R4bn in losses. These operational failures compounded chronic underinvestment in infrastructure, leading to mounting maintenance backlogs and a spike in derailments. At the ports, inefficiencies and equipment shortages turned Durban and Cape Town into export chokepoints. Financially, Transnet was equally distressed, with poor free cash flow, high gearing, and multiple breaches of bank covenants shaking investor confidence. Executive turnover and governance lapses deepened market uncertainty. Without decisive action, Transnet's collapse was beginning to look inevitable. The turning point came in 2023. With logistics failures slowing economic growth, pressure intensified from business leaders, trade unions, and the government. In response, President Cyril Ramaphosa launched the National Logistics Crisis Committee (NLCC), bringing together public and private sector leaders. In parallel, Transnet unveiled a formal Recovery Plan in September 2023, backed by new executive leadership and a R51bn government guarantee facility. This marked a clear pivot from crisis management to structural reform. Operational momentum: Real improvements in rail and ports Since then, the results have begun to show. After Transnet's rail volumes dramatically fell by 34%, from 226 million tonnes in FY18 to 150 million tonnes in FY23, we've started seeing signs of improvement. Rail volumes have increased to 160 million tonnes for FY25, a 13% increase from the 152 million tonnes in FY24. The trajectory is clearly moving in the right direction, with Transnet targeting 181 million tonnes for FY26. Graph 1: Rail volume turnaround On the port side, Durban Pier 2, which handles nearly half of South Africa's container traffic, was equipped with 20 new straddle carriers, reducing backlogs by 45%. In the coal corridor, where sabotage and theft had long disrupted flows, Transnet reported a 65% reduction in security incidents between September 2023 and March 2024, following joint efforts with customers and law enforcement. While this is a positive internal operational metric, it reflects progress specific to the coal line and not the broader network. Structural and strategic overhaul: The long game is taking shape Operational gains are being reinforced by deeper structural reform. The R51bn in government guarantees has stabilised liquidity and funded critical capital expenditure. In addition, the government has recently approved a top-up of R94.8bn to further aid with infrastructure maintenance. Transnet has also received support through the National Treasury's Budget Facility for Infrastructure to fund key projects associated with improving the broader logistics sector. Meanwhile, leadership renewal has sent positive signals to markets. CEO Michelle Phillips, COO Solly Letsoalo, and CFO Nosipho Maphumulo bring a blend of institutional memory and operational credibility. They have accelerated procurement, improved coordination with customers, and fostered investor confidence. Critically, Transnet is opening its networks to private participation. The sale of rail slots to third-party operators, the establishment of a Private Sector Participation (PSP) office to engage with the private sector, and the appointment of an independent infrastructure manager are early steps towards a hybrid model that retains public oversight while inviting private capital and operational capacity. Investment case: Stability, yield, and optionality For bondholders and infrastructure investors, the implications are significant. Government backing has underwritten Transnet's recent issuances and mitigated refinancing risk. Free cash flow remains constrained, but improved volumes and capital discipline point to a medium-term deleveraging path. Beyond credit, Transnet is fast emerging as a platform for co-investment. From rolling stock and corridor upgrades to terminal concessions, the post-crisis environment is creating new bankable infrastructure opportunities. From a Ninety One perspective, our contribution to these developments is reflected through initiatives such as our SA Infrastructure Credit Fund, which helps mobilise institutional capital into critical infrastructure, including transport and logistics. With a focus on senior debt, the Fund supports well-governed, economically strategic projects, reinforcing the growing role of private capital to support the government in addressing South Africa's infrastructure backlog. Conclusion: Transnet as a renewed strategic asset While challenges remain, Transnet's recovery is gaining credibility. For institutional investors, this is no longer just a troubled SOE; it is a strategic national asset at the centre of an unfolding economic and policy realignment. Backed by reform, capital, and political resolve, Transnet's transformation signals a turning point for South Africa's logistics and for those with the capital and conviction to stay the course. All rights reserved. © 2022. Provided by SyndiGate Media Inc. (
The Citizen
6 days ago
- Business
- The Citizen
Government under fire for splashing on employees' salaries
'For us to effectively compete with the Chinese, our salary structure must be similar.' Critics slam the South African government for allowing many of its employees to take home millions in salaries, while most of the ordinary citizens struggle to make ends meet. Public servants' salary increases are being implemented while most cities are collapsing right in the eyes of the world. This raises the question about the government's priorities. Many have suggested that instead of increasing public servants' salaries, the money can be used to repair or replace collapsing infrastructure. ALSO READ: More than R140 million in salaries paid to suspended government employees Increase salaries or fix the city? Moeletsi Mbeki, political economist, criticised the government on the State of the Nation podcast for the high salaries of employees. He highlighted that the money can be used to fix railway tracks, towns, roads, and water infrastructure. 'They are not building new railway tracks; they are destroying them. Instead of creating new towns. They are allowing the road, water, and electricity infrastructure to collapse while they tax the rest of the economy to pay themselves phenomenal salaries.' Mbeki was referring to the National Treasury's 2023 Medium Term Budget Policy, which outlined that 55 000 government employees take home more than R1 million per year in salaries. Government employees salaries breakdown The government employees that are being referred to include teachers, healthcare workers, police officers, military personnel, employees in national, provincial, and local government, as well as public entities and state-owned companies. National Treasury's 2023 Medium Term Budget Policy showed that most of the public servants moved into higher-earning categories, because of the higher cost-of-living adjustment. The number of employees who earn more than R1 million per year increased from 10 000 to over 55 000 in ten years. While 48% of employees earn between R350 000 and R600 000 per year. ALSO READ: Here's what some of South Africa's SOE bosses earn Salaries must be cut Mbeki in the podcast said the salaries of South Africa's government employees must be cut to align with those of key competitors. 'For us to effectively compete with the Chinese, our salary structure must be similar.' In the interview, he rejects the need for transformation, and calls for urgent, practical development — from green energy and infrastructure renewal to education reform and economic reindustrialisation. He argues the ANC's legacy has been one of mismanagement and elite enrichment, with South Africa's African middle-class prioritising 'eating' over nation-building. However, Mbeki remains hopeful, believing that new leadership and vehicles for progress will emerge. Public servants earn more than doctors Jacques van Wyk, CEO of JGL Forensic Services, argued in a post that most public servants earn more than qualified doctors. JGL Forensic Services is an internationally recognised forensic services company helping businesses and government departments develop ethical, sustainable practices. He said the public servants' salaries have put massive pressure on government finances. Rewarding a job well done 'I'm all for rewarding a job well done, but you don't have to look very far to see that South Africa's civil service is not doing its job very well at all,' said van Wyk. He made reference to Dawie Roodt, Chief Economist of the Efficient Group, on his view about how public servants are paid. 'We have approximately 1.3 million civil servants in South Africa, and they are mostly overpaid and underworked. The big question is, what can be done to improve government efficiency? We spend a huge amount of money on the whole state machinery, and this economy simply cannot keep on carrying this massive burden.' Van Wyk agrees with Roodt that 'the solution is not to suck more money out of the system, but rather to put policies in place to spend less.' NOW READ: Godongwana cuts government spending to offset VAT shortfall
The Star
04-08-2025
- Business
- The Star
Danantara unveils sweeping reforms for SOE pay
FILE PHOTO: A sign for Indonesia's sovereign wealth fund Danantara is seen in front of its headquarters in Jakarta, Indonesia, February 28, 2025. REUTERS/Willy Kurniawan/File Photo JAKARTA: State asset fund Danantara has announced a major overhaul of bonus and compensation rules for state-owned enterprises (SOE) directors and commissioners, aligning rewards with global standards of corporate governance. Under the new rules, directors' incentives will be strictly tied to measurable operational outcomes and financial performance, based on audited statements that reflect actual business conditions. Meanwhile, commissioners will no longer be eligible for performance-based bonuses, in line with international best practices that advocate for fixed compensation to ensure their independent oversight role. 'This restructuring represents a comprehensive overhaul of the government's incentive system,' Danantara chief executive officer Rosan Roeslani said in a statement issued last Friday. 'We want to ensure that every reward, especially for the board of commissioners, is aligned with its contribution and actual impact on the governance of the SOE concerned,' Rosan said. The policy draws from global benchmarks, including the Organisation for Economic Co-operation and Development Guidelines on Corporate Governance of State-Owned Enterprises, which advocate for fixed remuneration for supervisory roles to ensure impartiality and accountability. The reform is seen as a bold move to reset the governance within Indonesia's SOEs and signals a broader shift in public sector compensation strategies. The policy, detailed in an official letter, will take effect this year and apply to all SOEs within Danantara's portfolio. The move is part of a broader structural reform agenda aimed at creating a more transparent, accountable and efficient SOE ecosystem that prioritises public interest over personal gain. Danantara said the reform does not amount to a reduction in remuneration, but 'a realignment'. Commissioners will continue to receive a fixed monthly income reflective of their roles and responsibilities. However, the elimination of variable, profit-based compensation is intended to reinforce their independence and supervisory integrity. 'This is not about cutting pay. It's about making it appropriate,' Rosan said. 'Commissioners will still be compensated fairly, but without the distortions of performance-based incentives that can compromise oversight.' The reform comes amid heightened scrutiny over SOE governance practices following a wave of controversial political appointments. With 30 of 56 deputy ministers now holding commissioner posts in major SOEs, critics argue that governance is increasingly driven by political patronage. These include recent appointments of Second Deputy Higher Education, Science and Technology Minister Stella Christie to Pertamina Hulu Energi and former athlete Taufik Hidayat to PLN Energi Primer Indonesia. Political observers and anti-corruption experts have flagged these dual roles as conflicts of interest. 'It shows weak commitment to anti corruption efforts,' Indonesia Corruption Watch's Yassar Aulia said on July 13. — The Jakarta Post/ANN
Business Recorder
04-08-2025
- Business
- Business Recorder
Transparency, efficiency in SoEs: MoF developing cashless systems for G2P, P2G
ISLAMABAD: The Ministry of Finance (MoF) is reportedly developing a cashless payment mechanism for Government-to-Person (G2P) and Person-to-Government (P2G) to ensure transparency, efficiency in the State Owned Entities (SOEs), well informed sources told Business Recorder. In this regard, a Sub-Committee under the chairmanship of Secretary Finance, Imdad Ullah Bosal has started consultations with all the concerned ministries including Ministry of Foreign Affairs, Ministry of Defence and Ministry of Defence Production. Chief Secretaries, Finance Secretaries of four provinces, AJK and Gilgil Baltistan, and State Bank of Pakistan (SBP) are also on the board. Advisor to Prime Minister, Dr Syed Tauqeer Hussain Shah, has also informed all the ministries that Prime Minister had constituted a Steering Committee on Cashless Pakistan on June 22, 2025. Digital payments should be made easier than cash: PM Shehbaz One Sub-Committee, with Finance Division as lead, is working to develop a plan for digitizing government payments, both Government-to-Person (G2P) and Person-to-Government (P2G) so as to improve efficiency, transparency and accountability in financial transactions between the government and citizens. According to Advisor to Prime Minister, in order to develop a comprehensive plan covering the entire spectrum of such transactions, there is a need to have a complete list of SOEs, autonomous bodies/ authorities/ organizations which carry out G2P and P2G transactions. Such transactions include but are not limited to payment of salaries, pension, vendor payments, subsidies and welfare payments as revenues of the government. He asked all the ministries to submit the following information to CEO Karandaaz /Secretary to the Steering Committee on Cashless Pakistan ;(i) name of the Ministry ;(ii) name of the SOE/autonomous body/authority/organization ;(iii) head of the SOE/autonomous body/authority / organization ;(iv) SOE Focal Person name/ email/contact # (WhatsApp); (v) nature of G2P/P2G transaction tax/non tax, etc.) (salaries/pension/vendor ;(vi) frequency of transactions (daily/ annual) ;(vii) current payment mechanisms (cash, website, etc.) ;(viii) annual transaction volume (PKR semi-digital/ cash/ cheque);( ix) total number of beneficiaries in monthly/half-yearly/; and (x) any existing digitisation efforts and challenges faced in digital payments. For the State Bank of Pakistan, the following revised target, as proposed by the Sub-Committee on digital payments innovation and adoption, were approved: (i) active digital commerce payment points include QR codes- 2 million from existing 0.5 million ;(ii) active merchant-1 transaction per month ;(iii) the number of mobile/ internet app and digital banking users to be increased to 120 million from 95 million during FY 26;(iv) the number of digital transactions will be enhanced by 100 per cent to 15 billion from existing 7.5 billion ; and (v) remittances to be credited in bank accounts/ wallets ( no cash payments)-100 per cent digital from existing 80 per cent. Secretary Finance and Governor State Bank of Pakistan have been directed to revise annual subsidy allocation ceiling for supporting cashless transactions to Rs 3.5 billion ( 0.5 per cent incentive to banks for encouraging merchants on boarding on Raast). Banks may charge MDR of up to 0.25 per cent from merchants. Any amount in excess of this ceiling to be borne by the service providers. The Government Payment Sub-Committee, in consultation with provincial governments and relevant stakeholders, shall review the proposed timelines for implementation of its proposed recommendations. For submission of plans on State Owned Entities (SOEs) and P2G targets, revised timelines, reduced by at least one fourth will be shared during the next meeting of the committee. Governor SBP has been directed to ensure that private sector members on the Board of Raast Payment Pakistan shall be renowned experts with a proven professional track record in the field of digital payments. Copyright Business Recorder, 2025
