Mboweni says SAA would be a hard sell
PARLIAMENT – Finance Minister Tito Mboweni on Thursday said it would be hard to find a private equity partner for South African Airways (SAA) and again made a case for selling the national carrier.
"I doubt you are going to find a candidate to come in," he told a joint sitting of Parliament's standing and select committees on finance and appropriations, adding that the airline's debt of some R21 billion would deter investors.
"Nobody has that kind of money."
Mboweni went on to say that SAA was not used by South Africa's working class majority and asked members of Parliament (MPs) to consider whether it would not be wiser to direct state funding to ensuring that trains and other forms of proletarian transport ran better.
As he did ahead of his maiden medium-term budget policy statement on Wednesday, the minister again referred to the closure of Swissair in 2002 after it was kept going by government funding for years.
"Swissair failed and they closed it down. They closed the thing because they did not know how to run it."
He said part of SAA's woes stem from contracts that see suppliers charge it inflated prices.
"I'm not suggesting that immediately we close it down, I am just saying let's think carefully.
Mboweni on Wednesday announced that the airline would receive a further R5 billion as part of its recapitalisation.
He was appointed a fortnight ago and it the first minister to moot the sale of the loss-making airline. It posted a net loss of R5.7 billion in the last financial year.
African News Agency (ANA)