The National Ports Authority is to become an independent subsidiary of Transnet with its own board. This was announced by President Cyril Ramaphosa on Tuesday morning.
He says the creation of the entity will allow the Port Authority to make its own investment decisions and ensure that it treats all terminal operators fairly and equally. He says this is part of government’s efforts to accelerate economic structural reforms.
Ramaphosa says Public Enterprises Minister Pravin Gordhan will appoint the interim board of the new entity by the end of this month.
This will mean the establishment of an independent National Ports Authority as a wholly-owned subsidiary of Transnet, with its own board appointed by the Minister of Public Enterprises.https://t.co/D4N9xaqoYG
— Cyril Ramaphosa ?? #StaySafe (@CyrilRamaphosa) June 22, 2021
It is for this reason that we are today announcing the establishment of the Transnet National Ports Authority as an independent subsidiary of Transnet, in line with the National Ports Act of 2005.
#GrowSouthAfrica ??https://t.co/D4N9xaqoYG— Cyril Ramaphosa ?? #StaySafe (@CyrilRamaphosa) June 22, 2021
SAA partner
Ramaphosa says no final decision has been made on the new Strategic Equity Partner for South African Airways.
This is despite the announcement by Gordhan earlier this month that Takatso Consortium is the preferred partner. Ramaphosa says government and the consortium are currently involved in a process of due diligence.
The company is evaluating whether it is worth proceeding with SAA, while government is evaluating whether Takatso has the resources to run the airline.
Announcement of Transnet National Ports Authority as an independent subsidiary of Transnet:
Earlier this month, Gordhan announced that the consortium will hold a 51-percent stake in the airline, and government the remaining 49-percent.
Industry experts say the deal is not transparent and question why due diligence was not completed before the deal was concluded.
The Takatso Consortium will invest just over three-billion rand in the new SAA. Government says once the consortium has completed due diligence into the business, a sale and purchase agreement will be signed before the official launch of the new SAA.
But industry experts were wondering how the deal was finalised without due diligence being completed.
Wits University Professor Tshepo Mongalo elaborates, “When I heard that there would be no money exchanging hands as a result of this transaction I realised that this is probably a financial assistance transaction, the equivalent of vendor funding. As South African Airways is regulated under the Company’s Act, there is a need to comply with Section 44, they must be compliant with solvency and liquidity tests and that the transactions must be in the best interest of the company. SAA just came out of business rescue and it may not be complying with the solvency and liquidity test as required. And on top of that, I wonder how much due diligence has been done to see if this transaction is in the best interest of the company.”
Minister Gordhan’s briefing on SAA:
