CAPE TOWN - The Portfolio Committee on Public Enterprises expressed concerns about the state-owned Denel and South African Express Airways reliance on government for financial sustainability
Denel and South African Express Airways on Thursday briefed the Portfolio Committee on Public Enterprises on their performance targets for 2018/19 and turnaround strategy.
The committee has raised this issue with the Minister of Public Enterprises stating that tough decisions need to be taken on entities in this position, although selling is not an option.
The committee heard that, since it was grounded in May, South African Express has entered into negotiations with SAA.
The committee welcomed the recommencement of SA Express flights and the announcement that the airline has stopped using chartering aircraft.
Members of the committee said they had expected to see plans to make these entities profitable and questioned Denel’s ability to meet its financial obligations, considering its liquidity challenges.
Members assured Denel that it has their support for a review of all major contracts, so that it can recoup monies from those that did not follow due process.
However, the committee cautioned against taking matters to the courts, as this burdens government with the high costs of litigation.
Committee chairperson Lungi Mnganga-Gcabashe said that, for these entities, quarterly reporting is not often enough; frequent updates on progress will be necessary.
The entities were asked to prepare forensic investigation and disciplinary process reports for when they next brief the committee and they were also asked to keep the committee informed about civil or criminal investigations.
Mnganga-Gcabashe told South African Express management to lay criminal charges against the people allegedly responsible for bringing the airline to this point.
Denel and South African Express said they will be able to present turn-around plans when they next appear before the committee.
- BUSINESS REPORT ONLINE