SAA Airbus deal outcome welcome - HSF

Foundation says it has confidence in Pravin Gordhan's abilities and wishes him all

Helen Suzman Foundation pleased with the SAA/Airbus deal outcome

22 December 2015

Like others, the Helen Suzman Foundation ('HSF') was concerned about the South African Airways ('SAA') Board's attempt to modify the National Treasury’s approved deal with Airbus, finalised in July 2015. Yesterday (21 December 2015), we received two pieces of good news from the Treasury.

The first was the statement to the effect that the Minister of Finance, Mr Pravin Gordhan, had directed the Board of SAA to conclude the swap transaction with Airbus in line with the Treasury's July approval. This step means that SAA has avoided the need for payment to Airbus of approximately USD 40 million (about R 600 million at the current exchange rates) and has thus strengthened its financial position. the second was a letter from the Minister of Finance, to the HSF, assuring his intention to perform his duties in terms of the law.

These developments are part of a useful programme to stabilise the South African economy and public finances in the wake of recent instability in Cabinet appointments. Much more remains to be done to stabilise state-owned enterprises, in particular SAA, in order to prevent them from becoming a burden on state resources in difficult times.

Maladministration and inappropriate payments need to be curbed, and a firm hand is needed to bring government revenue and expenditure into an appropriate balance. Like the ratings agencies, the HSF will be watching the government’s fiscal position carefully. We have confidence in Mr Gordhan's abilities and wish him well in his difficult task.

Statement issued by Francis Antonie, Drector, Helen Suzman Foundation, 22 December 2015