Gordhan welcomes funding for SAA, criticises opponents for lack of insight

29 October 2020 - 09:49
Pravin Gordhan has welcomed the government's commitment to provide R10.5bn to finalise the business rescue plan and restructuring of SAA.
Pravin Gordhan has welcomed the government's commitment to provide R10.5bn to finalise the business rescue plan and restructuring of SAA.
Image: Picture: TREVOR SAMSON

Public enterprises minister Pravin Gordhan welcomed the government's commitment to provide R10.5bn to be used to finalise the business rescue plan and restructuring of SAA.

Finance minister Tito Mboweni announced the commitment to provide funding for the airline when he tabled his medium-term budget policy statement on Wednesday.

Gordhan took a swipe at the DA, other opposition parties and some analysts' criticism of the funding and said he was shocked by their lack of insight, financial literacy and understanding of governance processes.

DA MP Geordin Hill-Lewis said on Wednesday that Mboweni's decision to “continue to pay for a zombie state company” was a slap in the face of the poor.

Hill-Lewis argued that R10.5bn allocated to SAA could have been used, among other things, to build 440 new clinics, 66,500 new RDP houses, 130 new schools, or fund 80,000 new teaching degrees or 27,000 new medical graduates.

Gordhan said the DA ignored the suffering of SAA employees and the threat of them losing their jobs.

The ministry said it believed the completion of the business rescue process was the only viable path to a viable and sustainable national carrier — one which supports job preservation and the ability to bring the airline back from the brink to a position where employees, suppliers, and business partners could continue to contribute to the economy.

“Failure to allocate the funds would have resulted in the liquidation of the airline at the cost of more than R18.5bn.

“Further, the liquidation would have meant that SAA employees would have been worse off and received a maximum of about R32,000 per staff member, regardless of years of service, to the extent that there are funds available,” the ministry said in a statement.

It said the department of public enterprises was engaging constructively towards the formation of a new airline in the first half of 2021.

TimesLIVE

Finance minister Tito Mboweni tabled his medium-term budget policy statement (MTBPS) on October 28 2020. Many called this particular one a 'balancing act' in light of SA's having to rebuild its economy due to the Covid-19 pandemic. Government spending and debt, SAA rescue plan and the State Capture Commission of Inquiry were just some of the topics covered in his address.


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