THEBE MABANGA
THE DEPARTMENT of Public Enterprises has received the draft rescue plan for South African Airways (SAA) from the airline’s Business Rescue Practitioners (BRPs) and will now be discussed within government, creditors and unions.
“Government has not discussed the plan yet and no decisions have been taken on some of the proposals it contains,” the department said in a statement.
At an appearance before the Standing Committee on Public Enterprises last month, Public Enterprises minister Pravin Gordhan told the committee that in early May, the department received a “deficient” plan that he could not back.
Scopa insisted on being show the draft plan.
The hearings also highlighted a number of differences between the department and BRPs.
Among a number were the multiple extensions that BRPs had been granted since being appointed in December.
Gordhan pointed out that these were granted by creditors and employees rather than by his department.
Gordan is also at odds with the Practitioners proposed approach of winding down SAA, which would entail sale of assets, and instead prefers those assets to be used to launch a restructured airline.
“The government has embraced the restructuring process as part of a path to a new, dynamic and financially viable airline that will serve South Africa’s economic and strategic interests,” the statement read.
At the SCOPA hearing, Business Rescue Practitioner Siviwe Dongwana said the cost of restructuring the airline would be R7.7 billion.
This includes payment of dividend to creditors, retrenchments cost for SAA and subsidiaries, the airline’s recapitalisation and working capital.
He did not give a breakdown of the figure.
At the same hearing, acting Director General of the department Kgothatso Tlhakudi told SCOPA that the figure is a “moving target” which at one point was presented as R7.1 billion.
Ahead of the release of the statement a speculative figure of R21 billion as the cost of the rescue plan was bandied.
This was shot down by ministerial spokesperson Sam Mkokeli.
He did not provide an alternative figure.
“We will review the Plan, explore various funding options, and communicate our decisions in due course,” said Mkokeli.
(Compiled by Inside Politics staff)
