Image: Adobe Stock
Image: Adobe Stock
Following Friday’s bombshell announcement that 51% of South African Airways (SAA) will be sold off to private ownership, the Democratic Alliance (DA) have poured cold water on the plan, saying that the privatisation of the failed SEO has happened far too late, leaving the public with more questions than answers.
SAA will soon be majority owned by the Takatso consortium, which is comprised of Johannesburg-based Global Airways – which owns recently launched domestic airline Lift – and private-equity firm Harith General Partners. It has pledged to invest over R3.5 billion into SAA over the next three years as a majority, black-owned shareholder.
Takatso consortium’s ANC links questioned
Alf Lees, the DA’s Member of the Standing Committee on Public Accounts, said in a statement on Friday that despite the party having called for SAA to be sold off to the private sector to remedy the airlines shambolic financial position, the move remains questionable.
Lees said that Harith has strong ties with the African National Congress (ANC), leading him to believe that there might be more to the deal than simple equity interest.
“The first major concern is the fact that the board of Harith General Partners is chaired by Jabu Moloketi, who chaired the Public Investment Corporation and was also Deputy Finance Minister when Harith was granted R17 million in seed funding back in 2006,” he said.
“It is noteworthy that, whenever the ANC engages in public-private partnerships, it is almost always ANC bigwigs that benefit most.”
SAA debt in question
On top of political scepticism, Lees said that the move remains unfinalised, given Public Enterprises Minister Pravin Gordhans admission that the Takatso Consortium must still undertake a normal due diligence exercise before the definitive sale and purchase agreement is completed.
“This is worrying in light of the fact that Minister Gordhan seems confident that the Consortium will provide R3 billion in capital for the ‘revitalised’ SAA,” he said. “Clarity is needed as to what will happen should the Consortium not go through with the purchase of the majority-shareholding in SAA.”
He said that Government is still responsible for the historic liabilities of SAA and requires R14 billion in this regard, “R10 billion of which will come from the Special Appropriations Bill currently in front of Parliament”.
“Minister Gordhan has, after all, promised that the new SAA will be independent from the fiscus and thus taxpayers, so it is crucial that this promise be fulfilled lest even more taxpayer money is required for SAA in future.”
What about Mango?
The DA are also concerned about the vision to list SAA on the stock exchange through an initial public offering. He said that clarity is needed with respect to the shareholding that the Consortium will maintain if SAA is publicly listed on the JSE.
“Last but not least is the concerns around the subsidiaries of SAA, most notably Mango. The Minister only stated that the future of the subsidiaries is still to be determined through a joint assessment with the Consortium, without giving any further detail,” said Lees.
“The DA fears that the Department of Public Enterprises has jumped the gun on the matter in a vain attempt to placate taxpayers whose monies are being wasted on an airline that should have been sold off in its entirety long ago.”
