Medium-Term Budget Speech
SAA, Post Office and other ailing SOEs to receive billions in cash-bailouts
Finance minister Tito Mboweni has announced a R9.1-billion bailout of struggling state-owned companies such as national carrier SAA and regional airline SA Express.
In his first medium term budget policy statement to parliament on Wednesday‚ Mboweni announced that the troubled SAA would once more be recapitalised by the taxpayer to the tune of R5-billion.
This is despite SAA having received a similar recapitalisation of R3-billion in September last year to help service its debts amounting to R16.4-billion.
Mboweni's rescue package for SOCs would also see regional airline SA Express receiving a R1.2-billion bailout.
SA Express earlier this year had its flights grounded by the Civil Aviation Authority over safety issues and‚ along with SAA‚ has failed to present its annual financial statements to parliament within the stipulated legislative deadlines owing to outstanding expenditure items.
While rescuing SAA‚ Mboweni told a pre-MTBPS briefing that he was in favour of total or partial privatisation of SAA.
"(At some point) Swiss Air was not functioning very well and the Swiss decided to close it down and invite those who know how to run an airline to start a new airline called Swiss International. So these things are doable. So in the reconfiguration of SOEs‚ we need to be open minded and be modern enough because the world has changed‚ it has not remained static."
Mboweni has also given the SA Post office R2.9-billion to service its debts after it became the government's principal agency in the distribution of social grants.
The bailouts of the SOEs are among some of the spending adjustments the national treasury has introduced to the budget that was tabled by former finance minister Nhlanhla Nene in February.
"State-owned companies also receive additional allocations. SAA will receive R5-billion through a special appropriation bill to settle debt redeeming between now and March 2019.
"This will help top present a call on the airline's outstanding debt of R16.4-billion‚ which is guaranteed by government. In addition‚ R1.2-billion is allocated to SA Express Airways. The SA Post Office receives R2.9-billion to reduce debt levels."
Mboweni said new boards of directors at SOEs would be mandated to implement higher standards of corporate governance and efficient use of public money.
Mboweni's statement also indicated that government has allocated R5.8-billion to Sanral to prevent the calling in of R38.9-billion in loan-guarantees as the roads agency struggles to collect cash from defiant Gauteng e-toll road users.
"There is a risk that this guarantee might be called [in] because the agency is not generating sufficient cash from the Gauteng Freeway Improvement Project to settle redemptions falling due over the MTEF period. To prevent this‚ government has allocated R5.8-billion to Sanral in 2018/2019."
And motorists can expect to continue paying more to fill up their tanks‚ as "further large increases" are being planned for each of the next three years to manage the short-term liabilities of the Road Accident Fund‚ which a projected to grow to R393-billion by 2012/22 from the current R206-billion.
Another spending adjustment is the allocation of R3.4-billion to provide water and improve related infrastructure to mitigate the impact of the drought that ravaged the agricultural sector.
An amount of R800-million has also been allocated to the school infrastructure programme to eradicate pit latrines.