File picture: Henk Kruger/African News Agency (ANA)
File picture: Henk Kruger/African News Agency (ANA)

Mboweni takes a swipe at Gordhan’s department over SAA rescue plan

By ANA Reporter Time of article published Oct 29, 2020

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Parliament – Finance Minister Tito Mboweni on Thursday accused the Department of Public Enterprises (DPE) of misleading South Africans in a statement it issued welcoming his allocation of R10.5 billion to fund the business rescue plan for SAA.

"The press statement out of DPE this morning is misleading South Africans. It is not correct, but be that as it may," Mboweni cryptically told a joint meeting of Parliament's standing and select committees on finance.

It is customary for the minister to brief the committees the day after the delivery of his medium-budget policy statement, where the funding was announced as an in-year adjustment.

Mboweni was quizzed by MPs on the highly contentious allocation for the shuttered loss-making airline and said he wished to correct a perception that it was a bailout.

He said a bailout would have cost the country considerably more, and the money was destined for the implementation of the business rescue plan adopted in July.

However, this correction appeared to be addressed at his interlocutors in the committee as the Department of Public Enterprises had not described the funding as a bailout.

"This is not a bailout and I have asked somebody to send me the breakdown of what the issues are that lead us to the 10.5 billion for SAA and soon as I get that, I will get back to it, but I want to insist this is not a bailout," he said.

A bailout would have seen the National Treasury make a "huge injection" into SAA.

Mboweni said the funding was found in the main by trimming the budgets of the departments of police and education.

He has been openly opposed to committing further funding to struggling state-owned enterprises, in particular the national carrier, creating a perception of a political stand-off with Public Enterprises Minister Pravin Gordhan, who has been adamant that SAA should not be liquidated.

Gordhan's department said on Thursday the rescue plan was "the only option to bring the airline back from the brink to a position where employees, suppliers and business partners can continue to contribute to the South African economy and its integration into the global economy".

He said the allocation would allow the appointment of an interim board and senior executives, fund a voluntary severance package, help to settle SAA's legacy debt and pave the way for the selection of a suitable private equity partner to support the launch of a new airline."

Mboweni distanced himself from future plans to launch a new airline, telling MPs it was up to Public Enterprises to decide whether this would proceed.

"That it not my lane and I have been told many times to stay in my lane."

He suggested that those who had further questions address themselves to Gordhan.

Gordhan's office declined to comment.

African News Agency (ANA)

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