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Cape Town - National Treasury’s decision to grant SAA another guarantee, taking the total guarantee liability to the state to R20bn, is an error of judgement, said DA MP Alf Lees.
Finance Minister Pravin Gordhan approved SAA’s application for a going concern guarantee of R5bn with conditions after meeting with the new board on Friday. This will now allow the embattled airline to file its much-delayed annual financial results for 2014/15 as well as the 2015/16 results.
“The decision to grant the guarantee,” Lees said in a statement on Saturday “would bring the total guarantee liability to the state to R20bn. [It] is a significant risk because the guarantee cannot be revoked should the board be unable or unwilling to fulfil the conditions (set by Gordhan).”
FULL STATEMENT: Gordhan meets with new SAA board
The conditions include that the board start a new process of appointing an executive team at the national carrier, considering the possibility of merging with South African Express airlines and including a potential strategic equity partner, as well as closing loss-making routes.
Although the DA welcomed Gordhan’s conditions, it still held the view that the reappointment of Dudu Myeni as SAA chairperson was irrational, Lees said.
“That is why the DA is preparing its case for the reviewing of this appointment. There can be no illusion that the sensible thing to have done in order to give the new SAA board a fighting chance of saving SAA from total collapse would have been to remove Dudu Myeni from the board."
The DA plans to file an application to the Western Cape High Court to have Myeni's reappointment set aside.
The party will specifically focus on the “rationality” aspect of Myeni’s reappointment. The DA has won similar court cases, such as that of Former National Prosecuting Authority (NPA) head Menzi Simelane when the Supreme Court of Appeal ruled his appointment was invalid in 2011.
Despite the SAA not publishing annual financial statements, the DA claimed the airline is running at an apparent R1.3bn loss for the first quarter of 2016/17, a R4bn loss for 2015/16 and R4.7bn for 2014/15.
“The DA remains resolute that the additional state guarantee should not have been granted as long as Dudu Myeni remained a member of the board at SAA,” Lees said.
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