JOHANNESBURG - Parliament's standing committee on finance said yesterday that it believed Finance Minister Malusi Gigaba should have used another route to provide financial rescue to SAA, but was correct overall in acting to prevent the national carrier from defaulting on its Citibank loan.
The committee issued a statement after a parliamentary legal adviser found that the R3billion bailout Gigaba gave SAA in September may have been unlawful.
It had requested a legal opinion after the DA accused Gigaba of trying to sidestep parliamentary scrutiny by invoking section 16 of the Public Finance Management Act to help SAA meet its debt payments.
DA deputy finance spokesperson Alf Lees said the minister should have submitted a special appropriations bill instead of extending an 11th hour bailout, as it was foreseeable SAA would not have the R1.8bn needed to honour its loan agreement.
The committee agreed that a special appropriations bill would have been the correct option, but said ultimately it was up to the auditor-general to rule on the legality of Gigaba’s use of section 16.
It stressed that the legal opinion noted the section could be invoked where “good financial planning and management could not avert the need for exceptional or unusual expenditure”. And it added that there had been a clear need to come to SAA’s rescue as a default would have had dire consequences.