Photo: SAA
Photo: SAA
Following the controversial decision on by Finance Minister Tito Mboweni to green light a R10.5 billion bailout for practically defunct South African Airways (SAA), the Democratic Alliance (DA) have urged top UK bank Barclays to resist calls to supply the airline with any kind of short-term bridging finance.
The opposition party charged that Public Enterprises Minister Pravin Gordhan has requested the funding in order to further facilitate the salvaging of the airline.
Continuous SAA bailouts ‘morally reprehensible’
The decision to provide additional funding by Treasury was met with widespread condemnation. SAA has already received some R27 billion in bailouts in 2020 alone, and attempts to successfully initiate a business rescue plan have been painstakingly delayed.
The bailout comes in the wake of the COVID-19 pandemic and subsequent nuclear winter being felt by the economy, and in order to fund the bailout, cuts have had to be made to various key departments, most disturbingly the Department of Education.
The DA’s Member of the Standing Committee on Public Accounts, Alf Lees, said that the party would take their plea right to the top of the British bank.
“The Democratic Alliance (DA) will write to the Group CEO of Barclays, Jes Staley, to implore that his banking group does not supply short term bridging finance to the South African Airways (SAA) at the apparent behest of Public Enterprises Minister Pravin Gordhan,” he said.
“The continued efforts by government to fund this defunct State-owned entity at the expense of the South African public is morally reprehensible and should be opposed at all costs.”
Mboweni ‘reneged on promise’ to resist further bailout
He said that efforts to stave off support for the SAA by commercial banks have been ongoing for a number of years.
“SAA has not been a viable business for many years and the DA has campaigned South African commercial banks since December 2018 to stop giving government guaranteed loans to the airline or suffer reputational damage.”
“SAA has already received R27 billion from Treasury just this year. And that during a pandemic that left millions of people without jobs and money to put food on the table.”
He said that in a year in which “deep socio-economic fault lines” have been exposed Mboweni has reneged his promise to “prioritise people over a dead duck that will realistically never fly again”.
“Instead of funding the police, education, health or other vital sectors, Treasury’s continued bailouts is bleeding the country dry. The DA plans to oppose the bailout when Parliament votes on the budget in November.”
