Democratic Alliance (DA) leader Mmusi Maimane said on Thursday National Treasury’s planned R10 billion bail out for loss-making South African Airways would only provide short-term relief and the only solution was to place the national carrier under business rescue with a view to privatising it.
He told a media briefing the money would only cover debt of R6.9 billion that matures this weekend and would not provide working capital for SAA, meaning the airline will need yet further state funding.
Running SAA in this manner flouted the constitutional requirement that public money be spent responsibly, Maimane added, and said the DA would call for both the finance minister and SAA chairwoman Dudu Myeni to BE investigated in this regard.
“The R10 billion will not provide working capital to fund the losses that National Treasury and the latest turn-around plan indicate will continue for the next two years. This requires a further R13 billion in cash injections or what National Treasury euphemistically refer to as ‘re-capitalisation’,” he said.
“The reality is that SAA is insolvent and bankrupt. It must be stabilised, and sold off as soon as practically possible.”
Maimane noted that with two days to go before the debt repayments are due on Saturday, National Treasury had yet to indicate where it would find the money to give to SAA to honour these and its approach to the Public Investment Corporation showed a “deplorable” willingness to risk the pension funds of public servants.
“The crisis at South African Airways (SAA) is fast reaching boiling point with debt repayments totaling R6.9 billion due this Saturday, 30 September. Despite this urgent situation, National Treasury has yet to reveal where this enormous amount of money will come from.”
The money should instead be spent on poverty alleviation, he said, adding: “It is hard to believe that any government hoping to be re-elected would take money from the poor to subsidise travel for the rich.”
The sum of bailouts extended to SAA since 1999 came to R14.4 billion, while the company’s losses in the past five years added up to R15.7 billion over the past five years, according to the DA’s calculations.
Maimane laid the losses at the door of SAA chairwoman Dudu Myeni and said the DA would ask the Public Protector to investigate her conduct and that of Finance Minister Malusi Gigaba.
“Sadly, the management of SAA has become the very antithesis of the requirements set out in the Constitution. It is our belief that Malusi Gigaba and Dudu Myeni, in their respective official capacities, have breached Section 195 of the Constitution by not acting in accordance the principals established therein.”
He said the DA would also submit an application in terms of the Promotion of Access to Information Act to secure the release of due diligence report on SAA compiled by the PIC.
“The contents of this report may be the clearest indication yet of the true state of SAA and the DA believes the report should be released for public scrutiny.”
Government has insisted that SAA will not be sold off, but needs to be stabilised.
– African News Agency (ANA)