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EFF wants to introduce law to split responsibility for SAA between ministers

The Department of Public Enterprises has entered into an agreement to dispose of 51% of SAA shares to a private partner, the Takatso Consortium. Picture: Simphiwe Mbokazi/African News Agency ANA

The Department of Public Enterprises has entered into an agreement to dispose of 51% of SAA shares to a private partner, the Takatso Consortium. Picture: Simphiwe Mbokazi/African News Agency ANA

Published May 11, 2022

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Cape Town - The EFF has said it would table a private member’s bill to amend the South African Airways Act to split government shareholder responsibility in SAA to more than one minister.

It said this would ensure a far more comprehensive public consultation process before disposal of any of the airline’s shares.

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Currently the responsibility to acquire a strategic equity partner for SAA sits with Public Enterprises Minister Pravin Gordhan, as the department is the representative of the government as the shareholder.

Last week Parliament’s Standing Committee on Public Accounts (Scopa) heard from the Office of the Auditor-General that SAA would still need to account for the public funds it was allocated when it underwent business rescue, and 51% of its shareholding was disposed of.

The Department of Public Enterprises has entered into an agreement to dispose of 51% of SAA shares to a private partner, the Takatso Consortium.

Yesterday, in a statement issued immediately after a briefing of Scopa by the Department of Public Enterprises on the disposal of the majority of the government’s shareholding in SAA, the EFF called for due diligence in the sale of shares.

The EFF called on the Treasury to find a budget within its means to maintain SAA as it is currently right now.

They said SAA’s operations so far are not financed by any partner yet its operations are seamless and more routes have been helpful in generating and stabilising the airline.

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During the briefing, Finance Minister Enoch Godongwana justified the sale of a majority stake in SAA by saying the government had poured billions into the airline, but that it had become a fiscal drain.

Public Enterprises Minister Pravin Gordhan said the deal to sell 51% of SAA to the Takatso Consortium had yet to be finalised.

In June last year Gordhan had said that the Takatso Consortium consists of the pan-African investor group Harith Global Partners and the aviation group Global Aviation

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Yesterday he said currently the airline was using the R2bn it had received from the government to stay afloat.

The funds were part of the R10.5bn from the government for an arrangement termed “interim flying”.

Gordhan said the government was hoping to conclude the process of divesting itself of the 51% shareholding sooner rather than later to ensure that the responsibility for funding the operations of SAA becomes the responsibility of the majority shareholder.

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He said the Takatso Consortium had a number of conditions, like holding a majority stake and no political interference.

SAA was placed on a safeguard plan in December 2019 to avoid bankruptcy. Last year the independent administrators in charge of its restructuring declared SAA solvent again.

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