A bill to create a new state-owned holding company, which will take over the management of 13 troubled public enterprises, is expected to be tabled in parliament soon by South Africa’s minister of public enterprises.

The National State Enterprises Bill will set up the State Asset Management SOC Ltd., a vehicle to improve the performance and governance of firms such as Eskom, the power utility, Transnet, the rail and ports operator, and Denel, the arms maker. These and other state-owned companies have been beset by corruption and inefficiency, and are currently under the supervision of the Department of Public Enterprises.

The department has published a summary of the bill’s objectives and the list of entities that will be transferred to the new holding company in phases. The bill aims to enhance the operational efficiency of the state-owned companies and align them with the government’s developmental agenda. The holding company will exercise control and ownership of its subsidiaries in accordance with the South African Companies Act and other relevant laws.

The bill, however, leaves many questions unanswered. The president will have to devise a “national strategy” for the holding company and its subsidiaries, in consultation with a presidential advisory committee and the relevant ministers. The strategy will spell out the performance criteria and developmental obligations of the state-owned companies, and will be reviewed every five years.

The president, directly overseeing the committee which runs the SOEs, will effectively be the sole person responsible for holding company, giving him more power over state assets. The bill allows the president to delegate the administration of the Act or any of its functions to a cabinet member.

The bill’s implications for the future of the Department of Public Enterprises are unclear. It was previously suggested that state-owned companies would report directly to the ministers responsible for their sectors (such as energy or transport). But the creation of the State Asset Management company implies a new reporting structure that is linked to the presidency.

The full text of the Bill can be found here.