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The general feeling among the majority of SCOPA members was condolences.
- The SAA, DPE and the airline’s rescue professionals were meant to report back to Parliament on the progress made with the rescue process.
- However, the rescue practitioners notified Scopa at short notice that “a duel” was preventing them from doing so.
- Scopa President Mkhuleko Hlengwa said practitioners have to change their attitude about how they interact with Parliament.
The management of South African Airways (SAA) and the state airline’s business rescue professionals were criticized by some members of Parliament for not being prepared to report to the Standing Committee on Public Accounts (Scopa) on Tuesday on the progress made to date. .
In a letter dated March 15, joint rescue practitioners Siviwe Dongwana and Leslie Matuson informed Scopa President Mkhuleko Hlengwa (IFP) that they only received one notice of Scopa’s briefing in an email from the Department of Business. Public (DPE), which is a SAA Shareholder, on March 10.
The rescue practitioners indicated that they had been preparing for Tuesday’s briefing, but due to “a duel,” they were unable to finish their presentation to Scopa and were unable to attend the virtual meeting. The rescue practitioners therefore requested that Scopa reschedule the briefing until next week.
They recognized the need to provide Scopa with an update on the rescue process and committed to doing so prior to the completion of the rescue procedures.
Also, it appeared that no one from SAA itself had joined the briefing. A delegation from the DPE joined the briefing, including Public Enterprise Minister Pravin Gordhan.
‘I’m fed up’
The general feeling among Scopa members was one of understanding for the duel and the members agreed to find a new date. That said, Parliament will go into recess on Friday, so the briefing should be scheduled as soon as possible.
Hlengwa did not accept any of that.
“I’m fed up [with SAA]. I pointed out to the rescue practitioners on Monday that there are [only] two of them. I don’t want a precedent to be set. Our correspondence was sent to SAA on March 3. Scopa’s job is not easy. We are just trying to do our job. So these late requests for postponement when the correspondence has been sent on time are starting to become the norm, as with an Eskom briefing a few weeks ago, which will not be acceptable in the future, “Hlengwa said.
“The cooperation of rescue professionals with us, in general, has not been satisfactory. They have to change their attitude about how they interact with Parliament. It is going to make our working relationship very difficult. These are matters related to the public treasury and the authority of the committee must be asserted. “
Scopa member Alf Lees (DA) said during the meeting that it is important to hold someone accountable for misappropriation or incompetence at SAA.
‘No responsibility’
“Parliament paid money to SAA that is desperately needed for other purposes and yet we have no real consolation about the future of SAA. We repeatedly hear about a strategic equity partner, but this continues month after month. This is not negligible cash. These are the main state funds that are spent in an entity that many of us believe should not be spent. However, we are not getting the responsibility from the DPE or the SAA or the professionals of rescue on a SAA rescue that does not appear to be happening, “Lees said.
Committee member Bheki Hadebe (ANC) said Scopa is interested in an update on the progress made with the rescue process, especially since the rescue plan was adopted “a long time ago”.
“We all want effective oversight. We all want to [ensure] accountability, especially with regard to the public purse. Yes, we want to do our job and hold those in positions of authority accountable, but circumstances dictate that we understand [the reason why the practitioners could not present] circumstances, “he said.
SAA entered business rescue on December 5, 2019 and its rescue plan was voted and approved by creditors in July 2020. The plan requires the implementation of R10.3 billion, of which the DPE has paid more than R7 .8 billion so far. Employees stopped receiving salaries since May last year when the airline was effectively “suspended.” Since the lockdown began in late March 2020, only a few repatriation and cargo flights have taken place.
Over the years, SAA’s government bailouts were primarily in the form of commercial bank debt provided to the airline on the basis of government guarantees. This resulted in the company’s long-term debt skyrocketing from about R2 billion in 2011 to about R12 billion in 2019. By 2019, financing costs had increased to R1.3 billion a year, which it means that the cash needed for working capital had to be directed toward debt payments.
