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SAA ignored procedure in R14.6 billion contract - report

Jul 07 2016 10:41
Johannesburg - South African Airways (SAA) ignored procurement procedure when it awarded a contract to restructure $1bn (R14.6bn) of debt to a little-known financier, the Business Day newspaper reported on Thursday.

The SAA board went against the advice of its own treasury by agreeing to pay boutique financier BnP Capital a R256m success fee without putting the contract out to tender, according to the newspaper.

The fee is at least three times more than what the airline would have paid if it had put the contract on open tender, the newspaper said.

The cash-strapped carrier is under National Treasury oversight and has until now failed to publish its 2014-15 financial results despite numerous extensions, while relying on state guarantees of R14.4bn to keep it afloat.

SAA's financial woes were at the centre of a political storm in December when President Jacob Zuma axed finance minister Nhlanhla Nene.

Citing a confidential memo seen by its reporters, the newspaper said SAA had chosen to ignore procurement processes because of urgent loan repayments due at the end of June.

SAA did not immediately respond to an emailed request for comment.

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saa  |  treasury

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