Budget Speech 2020: SA to spend R16.4bn on SAA debt in medium term
PARLIAMENT - National carrier South African Airways will continue to rely on government support while it is under business rescue and R16.4 billion has been set aside over the medium term to repay state-guaranteed debt and cover debt-service costs, the National Treasury said on Wednesday.
The funding includes provisions for the state to repay urgent borrowings and some R2 billion ploughed into business rescue expenses so far, since the airline made the voluntary move in December, National Treasury staff explained shortly before Finance Minister Tito Mboweni tabled the 2020 budget in Parliament.
The Treasury said it was still in the process of finalising the cost adjustment, but the money would come from existing provisional allocations to state-owned companies .
"Government anticipates that additional funding will be required to cover restructuring costs in line with the business rescue plan," it said.
Mboweni joked, as he often does, that the allocations go against his personal will.
"I have a view that I cannot express," he told a media briefing shortly before delivering his budget speech/
The minister has repeatedly suggested that, if he could have his way, the government would dispose of the national carrier. The budget review confirmed that the company has lost R32 billion in the past ten years and remained technically insolvent.
For the other struggling state owned entity, Eskom, Finance Minister Tito Mboweni on Wednesday assured South Africa that the Government will do “whatever it takes” to ensure stable electricity supply. As I said, it is our number one task.
When delivering the 2020 National Budget Mboweni said the government had allocated R230 billion over 10 years to achieve the restructuring of the electricity sector.
- African News Agency (ANA)