Picture: Rogan Ward/Reuters/African News Agency (ANA)
Picture: Rogan Ward/Reuters/African News Agency (ANA)

Mixed reaction to SAA's R3.5 billion bailout from DBSA

By Zintle Mahlati Time of article published Jan 29, 2020

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Johannesburg - The Development Bank of Southern Africa’s R3.5 billion lifeline to cash-strapped South African Airways has been received with mixed reactions with questions being raised about the conditions behind the loan.

The Democratic Alliance (DA) has pushed back strongly and questioned the basis for the deal and what it means for taxpayers.

DA MP Alf Lees said he would be writing to the Minister of Trade and Industry Ibrahim Patel about the deal.

 He said DBSA could possibly be shifting money meant for meaningful development projects that could create employment.

“Given the fact that the bank falls under the mandate of Minister Patel, the onus rests on him to come clean on the details of this loan

"This is simply a disguised taxpayer bailout of the bankrupt SAA and it takes money that should be invested by DBSA in real and sustainable development projects that will create jobs for the 10 million unemployed and largely destitute South Africans and throws it into the bankrupt SAA black hole,” he said. 

Business rescue practitioners for SAA announced the deal with DBSA on Tuesday. SAA has been struggling to survive with a low supply of funds. President Cyril Ramaphosa had announced in December that the airline would be placed under business rescue which also resulted in flights being cancelled. 

The business rescue practitioners, Les Matuson and Siviwe Dongwana, had been working on getting funding for Eskom.

Trade union the National Transport Union has welcomed the deal but said his union would work on ensuring that there are no retrenchments during SAA’s restructuring process. 

 “We cannot rule out job losses, but we believe that the government should ensure that we minimise job losses. We are going to defend our members and ensure that they have their jobs and we are calling on the government to review its position,” said Mashudu Raphetha, NTM president. 

Political Bureau

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