Put SAA under business rescue as liquidity crisis continues, says DA

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Finance Minister Nhlanhla Nene must take the bold step to place South African Airways (SAA) under business rescue with a clear undertaking that the airline will be privatised within the 2018/19 financial year, the Democratic Alliance (DA) says on Sunday.

“The DA would write to Nene to urgently obtain a report on the procurement deviation requested by SAA CEO Vuyani Jarana to source additional loans of R15 billion that, according to a newspaper report on Sunday, was the basis for a deviation request,” says DA spokesman Alf Lees.

“Incredibly, the motivation for these funds apparently included hiring consultants to provide ‘cultural change services’. Surely after four months in the job SAA CEO Jarana has made it clear that the new culture is one of honesty, integrity, efficiency, and hard work is the order of the day,” he says.

The R10 billion taxpayer bailout of SAA was never going to be enough to keep the mismanaged, corruption-ridden, over-staffed, and inefficient state-owned airline in the air. Even the so-called turnaround plan under the new board and CEO showed losses continuing until 2020.

SAA had used up most of the R19.1 billion in government guarantees and there could be no further guarantees issued to a bankrupt and loss making SAA. Nene now had to take the bold step to place SAA under business rescue with a clear undertaking that the airline would be privatised within the 2018/19 financial year, says Lees.

“The DA will ensure that this is interrogated further when we put tough questions to SAA representatives who will be appearing before parliament’s standing committee on finance on 20 March 2018.”

“Instead of wasting another R4.7 billion on a further bailout that is apparently planned in 2018/19, these funds must be used to balance the 2018 budget instead of increasing VAT by one percentage point, an increase that will make it even more difficult for the poor and unemployed 9.2 million South Africans,” says Lees.

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