Thebe Mabanga
Public Enterprises Minister Pravin Gordhan is set to have crunch talks with South African Airways’ Business Rescue Practitioners in a final bid to stave off liquidation or prevent a fire sale of assets should liquidation occur.
This emerged at a briefing that Gordhan gave to parliament’s portfolio committee on public enterprises and the select committee on public enterprises and communications.
The joint virtual sitting received an update on developments at the SAA, Eskom and Transnet.
Gordhan told parliamentarians that the talks are to address a number of issues that have been “a matter of contention between shareholder and business rescue practitioners”.
He noted that they recently had an engagement after the Business Rescue Practitioners had indicated that SAA could not undertake Covid repatriation flights beyond Thursday, the 8th of May.
Talks have now staved off that calamity.
At the heart of Gorhdan’s enquiry to the BRP is accountability for how R5.5 billion advanced to the airline since they were appointed in December has been spent.
Gordhan suggested that there has not been sufficient accountability and that consultations with the shareholder required by law have not been forthcoming.
Instances of questionable spending includes a sum of R35 million spent on American Aviation consultancy whose output the department has had no sight of.
Gordhan would also like find if service professionals used during the Business Rescue Process such as accountants agreed to reduce their fees by 40%.
Gordhan also confirmed that government is exploring the possibility of establishing a new airline that’s “viable, competitive and restructured” and one that will save as many of the 4 700 as possible and will not depend on the fiscus for funding and would have a Strategic Equity Partner where appropriate.
Gordhan praised unions represented at SAA for participating in this process, including taking part in a workshop to shape the new entity.
As reported in Inside Politics earlier this week, the process of setting up a new airline entails deciding which local, regional and international routes to service and what aircraft to use on these.
Gordhan told the committees that any new airline to be launched will do so in an environment that will take between 18 and 36 months to recover.
Gordhan said the COVID-19 crisis also presents opportunities for the purchase or leasing of aircraft as airlines have cancelled orders or are not taking delivery of ordered planes.
At the same briefing, Eskom CEO Andre De Ruyters told the committees that the utility has used the National lockdown to undertake “opportunistic” sort term maintenance which has resulted in an additional 2 900MW, or just under 10% of total capacity, being added back to the system.
This is after the lockdown reduced demand by an amount of 7 500 MW and allowed Eskom to take 11 units out of service.
De Ruyter’s said they cannot undertake long term maintenance under current conditions.
He notes that the additional capacity should significantly reduce the probability of load shedding but emphaised that the utility prefers the gradual and phased approach that is currently being adopted to ensure there is no load shedding.
Transnet CEO Portia Derby told the committees that Transnet’s COVID-19 operation response is based on three scenarios: A quick recovery and economic bounce back that would cost R8.9 billion in revenue, an extended soft lockdown that would cost R12.25 billion in revenue as well as recurring waves of the pandemic with associated lockdowns whose impact on revenue has not been assessed.
During the lockdown, Transnet has had to reprioritise maintenance spending, added equipment at the ports and initially struggled with non-essential cargo that was at ports at the start of the lockdown but has since been cleared to facilities like City Deep, the inland port outside Johannesburg.
The meeting threatened to be fractious when the Economic Freedom Fighters MPs renewed the party’s customary attack on Gordhan, at one point referring to him as “untouchable” which he dismissed as “nonsense” and part of a false narrative, before departing the meeting, leaving MPs to squabble among themselves.
