Ramaphosa authorises probe of SAA Airbus deal | Fin24
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Ramaphosa authorises probe of SAA Airbus deal

Jan 31 2020 14:26
Jan Cronje

President Cyril Ramaphosa has authorised two new probes into the affairs of South African Airways and National Treasury, and expanded the scope of an existing investigation into cash-strapped state power utility Eskom.

The three separate proclamations were published in the government gazette on Friday.

In the proclamations, the president authorises the Special Investigations Unit to probe a wide array of allegations of corruption, tender fraud and maladministration related to the three entities.

The SAA probe will, among other things, focus on allegations of corruption related to the procurement of, or contracting for Airbus aircraft; maladministration associated with the airline's travel rebate programme; and suspect payments the flag carrier made to vendors. It will look back as far as 2002, when the airline and the Department of Public Enterprises first awarded a contract to the European multinational modernise the national airline's fleet. 

The proclamation relating to Eskom widens the scope of a existing inquiry that has been ongoing since April 2018. This probe has been focusing, among other things, on Eskom's procurement of coal, coal transportation services and diesel. This has now been amended to include its procurement of cloud computing services, software licenses and support services, and engineering and project management consulting services.

As Business Insider reported earlier, the SIU probe into National Treasury, meanwhile, will investigate the procurement of its Integrated Financial Management System. It will scrutinise whether the procurement was legal and fair, and whether it was influenced by the "improper intervention of employees or officials of the National Treasury.

Holding those responsible to account

"The SIU commits itself to execute the mandate set out in the proclamations and to investigate the allegations with integrity in order to deal with any corruption that might have occurred," the group's head, advocate Andy Mothibi, said in a media statement.

"We further commit to speed up the investigations to ensure that instances of maladministration, malpractice and corruption are reported, investigated and those responsible are held to account and make sure that losses suffered by the State Institutions are recovered."

The Airbus deal

In 2002 South African Airways and the Department of Public Enterprises awarded a contract to Airbus for the purchase and lease of a number of Airbus planes of various types to modernise SAA's fleet over a period until 2015.

By 2012, when SAA started to come under financial pressure due to increased oil and jet fuel prices as well as a weakening economy and rand in SA, the airline asked Airbus if it could renegotiate certain parts of the original contract. This included "swapping" certain planes still to be deivered for others by that time deemed to be more suitable for SAA's changed needs.

Airbus agreed and Treasury approved it. However, SAA's board and then chairperson refused to sign off on it.

The then chair instead proposed to Parliament that a rand-denominated lease be used instead of the already agreed upon arrangement. Treasury, however, said there was no proof produced that this would make any difference and instructed SAA to continue with the "swap" as originally agreed. Shortly after that President Jacob Zuma sacked Nhlanhla Nene as finance minister.



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