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MPs differ on SAA's fate - but agree bailouts must end

Nov 26 2019 18:12
Khulekani Magubane, Fin24

Members of Parliament in the National Assembly debated the state of beleaguered national carrier, South African Airways, on Tuesday afternoon - and while they differed on whether the state should cut its losses, all members agreed that bailouts for the airline should come to an end.

A strike at the airline, which ended last week Friday, gave South Africa a glimpse of the shambolic state of affairs, as the national carrier continues with plans to retrench about 944 staff in its bid to get its house in order.

Meanwhile former SAA chair Dudu Myeni, who is facing a civil case seeking to declare her a delinquent director, has said that she should not be the only one to blame for that state of the airline.

Governance failures

A motion for debate on the state of SAA was made by Inkatha Freedom Party MP Mfakazeleni Buthelezi.

Kicking off the debate National Assembly, Buthelezi said the biggest contributing factors for the state of affairs at SAA were governance failures, strategic blunders and corruption from past executives of the national carrier.

"Our people who elected us require action and a debate to take place in this house so that we can come up with solutions. It is the greed, abuse, corruption and flagrant disregard for the law," said Buthelezi.

Buthelezi said the IFP had long held that the SAA's reliance on public funds should be reduced through public-private partnerships.

"We must never deceive ourselves and think that the fact that workers are back on duty, it is the end of SAA's problems. This moment presents us with an opportunity to clamp down on mismanagement and save our national airline," Buthelezi said.

African National Congress MP, and chair for the portfolio committee on public enterprises, Sindiso Magaqa, said President Cyril Ramaphosa's recent engagements with state-owned entity chiefs showed government's commitment to unlocking their great potential as revenue generators.

Magaqa said while the ANC respected the "ideological purity" of those opposed to public-private partnerships as a solution for SAA in principle, the party knew that among them were the VBS cabal.

'Protecting the wealth they looted'

"We know they will launch continued attacks on honourable Minister Gordhan to protect the wealth they have looted to stay in the same neighbourhoods as the very capital they claim to hate," Magaqa said in a veiled reference to the Economic Freedom Fighters.

Democratic Alliance MP Alf Lees spared no ire for striking unions at SAA – the National Union of Metalworkers of South Africa and the South African Cabin Crew Association. He said the strike made SAA's financial worries worse.

"Who in their right mind demands a salary increase from a bankrupt employer, much less an 8% salary increase well above inflation?" said Lees.

Fed up 

Lees said South Africans were fed up with bailing out SAA, which has not tabled annual reports for the past two financial years. He said current leadership at the airline had to take airline should take some blame for the ongoing bedlam.  

"It is not only Dudu Myeni who should be declared a delinquent director. It cannot be allowed that the current leadership of SAA continue to trade recklessly while they continue to come to government with a begging bowl," Lees said.

EFF MP Nazier Paulsen said the failure of SAA could not be blamed on ordinary workers but on management and what he called the "Ramaphosa-Gordhan" government.

"The failure of SAA must be put squarely on [President] Cyril Ramaphosa and Gordhan's government. They have been presiding over government for two years now and entities are continuing to deteriorate. There is not plan from the Ramaphosa-Gordhan administration to turn them around," said Paulsen.

Freedom Front Plus MP Wouter Wessels took issue with continued bailouts, hostile unions and mismanagement undermined Ramaphosa and Gordhan's efforts in addressing the problems of state-owned entities.

"A salary with no increase is better than no salary. The challenges facing SAA, if worsened by strike action, are going to leave the 11 000 employees at the airline unemployed. But that is what you want and that is what trade unions want," said Wessels.

Drain on the fiscus

United Democratic Movement MP Nqabayomzi Kwankwa said a 100% government-owned SAA was no longer sustainable and only served to divert state resources away from other critical functions.

"SAA, like most SOEs, is a major drain on the fiscus. The UDM believes that the time has come for government to find a strategic equity partner for the airline. This should allow for government to have veto and overturn powers in strategic decision," said Kwankwa.

National Freedom Party MP Sheikh Imam agreed that a strategic partner was the way to go, as privatising or selling the airline altogether would not deal with the root causes for the rot at SAA.

Congress of The People MP Willie Madisha called for the re-skilling of staff who will be retrenched from SAA. IFP MP and Standing Committee on Public Accounts chair Mkhuleko Hlengwa said there was no point to government owning an airline that most of its people did not use.

DA MP Ghaleb Cachalia said the ANC government was clinging to SAA out of a "stupid" idea of patriotism. ANC MP Judith Tshabalala urged members to "build a social compact and reject privatisation".

Deputy minister of public enterprises Phumulo Masualle said the airline secured leases for aircraft, reviewed contracts with vendors and taken other steps to fix itself and that it needed ample support on its journey to becoming "fit for purpose".

da  |  saa  |  anc  |  eff  |  parliament  |  south africa
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