EFF statement on deliberate collapse of SAA by Minister of Public Enterprises Pravin Gordhan
15 April 2020
The EFF condemns the deliberate collapse of South African Airways (SAA) by the Minister of Public Enterprises Pravin Gordhan. Gordhan has done this by creating an environment of fiscal uncertainty and arrogantly dismissing advisory measures provided by appointed Business rescue Practitioners.
SAA was placed under business rescue on the 5th December 2019, in an attempt to save the entity and supposedly relieve the state of the burden it poses on the fiscus. The primary aim of this initiative was said to prevent the collapse of the entity, protect jobs and "restructure" the operations and management of SAA, a soft term sponsored by Stephen Koeseff for privatization. Pravin Gordhan has however in typical style undermined these efforts by not being cooperative and abiding to the very guidelines provided by government through him as the majority shareholder representative.
After having committed R4 billion Rand to SAA to assist in its business rescue process, only R2 billion was availed to SAA, with R3.5 billion being loaned from the Developmental Bank of Southern Africa. All of this funding was intended to support the entity through February 2020 until such a point where government had resolved on it preferred restructuring option.
Government resolved on a strategy that would see a high retention of jobs and recapitalization of subsidiaries amongst other interventions, which would cost roughly R7.7 billion. Due to the unnecessary lack of oversight by the Ministry of Finance and general incoherence in governance, the Budget Speech which was supposed allocate a budget to effect measures advised by business rescue practitioners for SAA was silent. Instead, the Budget availed R 16.4 billion to repay legacy debt accrued by SAA as a result of poor management and inconsistency of fund allocation by government.
It is therefore disingenuous to label the R10 billion requested by SAA as a bailout, as these are funds that are required to put in place the very measures that government itself has agreed upon to rescue the entity and secure jobs. Although the global Covid-19 pandemic has stretched the finances of government thin, these are funds that should have long been allocated but have not due to Gordhan's determination to collapse SAA and subject its employees to abject poverty.
Gordhan's response to those who have been charged with rescuing Eskom is filled with arrogance and a lack of regard to how his dismissive nature affects the lives of ordinary people. As a majority shareholder that represents government he is essentially back tracking on the commitments of government and leaving workers to fend for themselves during a global pandemic.
Gordhan has unilaterally denied SAA support for the extension of foreign currency borrowing limits needed for maintenance, he has denied SAA funding to execute government's very own rescue plan and denied SAA lending guarantees with respect to the rescue process.
It is therefore clear that Gordhan has no intention of rescuing SAA or protecting the incomes and livelihoods of it employees. He has no appreciation for the need for a domestic airline owned by the State.
This is dangerous when one considers that if it were not for SAA, we would have as a nation been unable to repatriate citizens stranded in foreign countries in the midst of the Covid-19 pandemic.
The EFF reiterates its call for multi-ministerial oversight of State-Owned Enterprises to prevent the inevitable arrogance of Gordhan from collapsing them. To term SAA's requests for financial certainty, which are in line with what government has expected of them as bail outs furthers the narrative of the entity as a burden, while in reality it is being deliberately sabotaged.
Issued by Vuyani Pambo, National Spokesperson, EFF, 15 April 2020
