President Cyril Ramaphosa in the National Assembly on Tuesday. PHOTO: GCIS
President Cyril Ramaphosa in the National Assembly on Tuesday. PHOTO: GCIS
President Cyril Ramaphosa in the National Assembly on Tuesday. PHOTO: GCIS
President Cyril Ramaphosa in the National Assembly on Tuesday. PHOTO: GCIS
President Cyril Ramaphosa in the National Assembly on Tuesday. PHOTO: GCIS
President Cyril Ramaphosa in the National Assembly on Tuesday. PHOTO: GCIS

PARLIAMENT – The ANC leadership on Tuesday indicated that it did not support the closure of SAA, siding with Public Enterprises Minister Pravin Gordhan against Finance Minister Tito Mboweni in their apparent disagreement over the future of the failing national carrier.

ANC secretary general Ace Magashule told a media briefing after a ruling party caucus meeting: "I can confirm that there is no intention to close down SAA."

He added that "comrade Pravin" had very clearly set out the stance of the ANC and the government on the case of the airline, which lost R5.7 billion last year.

President Cyril Ramaphosa also weighed in on the matter, telling the National Assembly it was not option to shut down the airline as it would mean the state as sole shareholder would have to settle its debt immediately, with big risks to the national finances.

"If we were to say let it shut down... it basically means that the debt that is in SAA now becomes payable immediately and has an impact on the debt that is carried by all other SOEs and that is how you are able eventually to collapse our fiscus," he told MPs during presidential question time in the chamber.

Ramaphosa stressed that at present the airline is "laden with debt".

Mboweni, who stepped into the finance portfolio last month following the resignation of Nhlanhla Nene, has repeatedly said that plans to find an equity partner for SAA would not work because nobody would buy into an entity with debt in the order of R21 billion.

Shutting down

Instead, he mooted the option of shutting it down, citing the example of the closure of Swissair after it limped along on state funding for years.

Mboweni first made the suggestion on the day he tabled his medium-term budget policy statement, in which he confirmed that the finance ministry was giving the airline R5 billion by March 2019 towards its recapitalisation in the latest of a series of cash-injections.

On Sunday, Public Enterprises Minister Pravin Gordhan directly contradicted the finance minister, saying the state's plans were to turn around the airline and make it a vibrant competitor in the aviation market.

Gordhan said he was placing the board and management of SAA on notice to "discharge with a greater sense of urgency and dedication, their professional duties to identify and implement immediate interventions".

He said the management of the airline needed to apply its mind to the task "with clear focus", to root out corruption, cancel all fraudulent contracts and prepare SAA for signing up a strategic equity partner in the near future.

Ramaphosa tried to reconcile what the two ministers had said, telling MPs Gordhan was "trying to elaborate more on what the minister of finance was saying and the future for SAA has to be how do we stabilise it and once having stabilised it how do we get a strategic equity partner".

The president noted that if the state were to try to sell SAA in its current state, "you would not be able to get any value for it, you would probably have to pay them quite a number of billion to take it off your hands".

African News Agency (ANA)