Public enterprises minister Pravin Gordhan. File photo: Ntswe Mokoena/Government Communication and Information System (GCIS)
Public enterprises minister Pravin Gordhan. File photo: Ntswe Mokoena/Government Communication and Information System (GCIS)

Gordhan pleads for time to let SAA rescue practitioners find answers

By African News Agency Time of article published Feb 19, 2020

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PARLIAMENT - Public enterprises minister Pravin Gordhan angered members of parliament's watchdog standing committee on public accounts on Wednesday when he said details of the SAA business rescue effort would not be aired until a blueprint for its future was put on the table. 

Gordhan pleaded with the committee to accept that it would not make sense for him to disclose details while a way forward for the stricken airline was still being mulled by the business rescue practitioners (BRPs), who were appointed on December 6 and have until March 6 to table a draft plan.

"The business rescue practitioners have to put forward a plan by that time and as soon as they are ready we will inform you... if the plan is ready and credible, we will inform you," he said.

The minister faced a barrage of questions, particularly from members of the EFF, who warned that his department and the BRPs would do well to keep trade unions on their side.

The labour court last week dismissed an application by National Union of Metalworkers of South Africa and the South African Cabin Crew Association to halt looming job cuts after the BRPs announced that the airline would scrap some loss-making routes.

Gordhan ventured that at present, it could be assumed that nearly all SAA flight routes were unprofitable because of the onerous aircraft leasing arrangement the airline had, but insisted that calls for clarity on which routes would be retained, were premature.

SCOPA chairman Mkhuleko Hlengwa said the committee disagreed with the lack of detail provided by the public enterprises department and would set a date soon after March 6 to engage with the BRPs on how they viewed SAA's future.

"What we don't want is half measures," he added. 

The committee had sought to cast the BRPs as accounting officers in terms of public finance legislation.

A spokesman for Gordhan's office clarified that they did not report to the department of public enterprises.

The minister did give his view on some key matters, including the need to save South African Airways Technical (SAAT). 

The ongoing Zondo commission of inquiry into state capture this month heard extensive testimony about alleged tender irregularities and bribery at the division.

"Once capture and corruption took over it was decimated," Gordhan told MPs. "But there is a huge amount of value in SAAT that needs to be saved."

He also said one of the shared tasks of the BRPs and government as the shareholder was to assemble an able staff component to steer SAA back to viability, which would require bringing "new expertise into the airline".

"We will work with the practitioners in this regard as well to find the relevant skills," Gordhan said. 

He dismissed calls to sell SAA, pointing out that right now nobody would be prepared to buy it.

"You would have to pay people to take SAA as it stands, that is the honest truth. Would you invest your money in a loss-making business?" he asked the committee.

Democratic Alliance MP Alf Lees said members of SCOPA had hoped to hear how the BRPs had arrived at the conclusion that the airline could be salvaged and at what rate it was consuming the most recent state bailout of R5.5 billion.

"SAA is bankrupt and by the early weeks of March 2020 will have burnt, as stated by minister Gordhan, the full R3.5 billion taxpayer bailout from the DBSA, on top of the R2 billion bailouts from banks. This in a short space of only three months," Lees said.

Gordhan has said more funds would be forthcoming but finance minister Tito Mboweni, who will table the national budget next week, has been non-committal.

He insisted that state-owned enterprises needed to become financially self-sufficient, adding that they still had a role to play in the economy.

African News Agency

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