New draft plan will see SAA continue as 'fiscal black hole', DA claims
Cape Town – The Department of Public Enterprises on Monday confirmed a draft business rescue plan has been tabled for South African Airways (SAA) after the opposition Democratic Alliance (DA) leaked a copy, saying it will see the government pour R21 million more into the carrier.
"Government has not discussed the plan yet and no decisions have been taken on some of the proposals it contains," the department said.
It says that the draft plan will be discussed by the government, creditors and staff of the embattled national carrier and that President Cyril Ramaphosa had at the weekend expressed full support for reviving the airline.
"President Cyril Ramaphosa on Sunday told members of the South African National Editors’ Forum that he saw a good future for the airline, which enjoys support right across the continent.
"The aviation industry plays a pivotal role in the battle against the coronavirus as Johannesburg can be a hub to distribute Covid-19 medical supplies," the department said.
"A viable aviation industry would also anchor many efforts to revive our economy and create jobs."
A copy of the plan was released by Democratic Alliance MP Alf Lees, who pointed out that it would see the state put up more than R16 billion to pay the airline's current creditors.
A further R2 billion will go towards retrenching staff and another R2 billion will be extended in the form of a capital injection to restart operations at the national carrier in the aftermath of the Covid-19 crisis, according to the draft plan.
It is reliably understood that it was shown to trade unions at the weekend.
Minister of Public Enterprises Pravin Gordhan has been locked in a stand-off with business rescue practitioners Les Matuson and Siviwe Dongwana, who were appointed in December.
Gordhan has expressed exasperation with their failure to deliver a plan to revive the airline as a viable, sustainable business, while they have said the government's refusal to commit to funding and the devastating impact of the pandemic on the industry is bedevilling the process.
At the end of April, Matuson and Dongwana signalled that the only feasible options for SAA were forced liquidation or a winding down of operations.
Gordhan last month countered that there would be no funding without a satisfactory rescue plan and further questioned whether the working capital provided to the company in the past five months had been wisely spent.
Lees said the draft plan suggested that the minister had prevailed.
"It follows a spirited political campaign by Gordhan to discredit the business rescue process and resurrect the folly of failure by calling for the establishment of a new state airline.
"That the BRPs are now singing from the same hymn book as Gordhan clearly shows that the minister has hijacked the process."
The DA has for years called for the closure of SAA. Lees said projections in the plan made it clear that the airline would continue to be a drain on state resources.
"If this draft business rescue plan is approved in its current form, SAA will continue to be a fiscal blackhole for years to come. The BRPs are projecting that the 'new SAA' will trade at massive losses totalling R 19.9 billion for the first three years."
African News Agency (ANA)