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Johannesburg – Competent professionals who are ethical in their conduct are needed to run public institutions, said Finance Minister Pravin Gordhan.
He was speaking at a briefing about the economy at Deloitte on Friday. During a question and answer session, Gordhan shed light on the situation at South African Airways (SAA) and highlighted the importance of having the right people appointed to run the airline, as well as other state-owned enterprises (SOEs).
“The key is that we need competent professionals to run the airline because they know how to run an airline,” he said. Gordhan added that SOEs and state-owned companies (SOCs) also require the right people, appointed in the right positions doing the right job. They should also have the right competence and the right level of ethical behaviour to run these public institutions, he said.
“You’re not putting your own money in, and taking your own risks where if you misbehave, you have taken the risk and you’ve lost,” he said. “This is public funds you’re risking at the end of the day. It’s a different proposition. So don’t play around with institutions where public funds are at stake.”
Gordhan said Cabinet has developed a new policy framework for SOEs and SOCs. “We want good governance, we want accountability. We want good financial management and we want any reliance that anyone envisages on the fiscus for the wellbeing of the institution to be something of the past, in time.”
He said these are intentions of the framework, and that actually achieving them is a “tougher” proposition.
“The public should be clear of what institutions are there for, and what is the behaviour of the people who operate within these institutions, and hold them to account for their behaviour,” he explained.
Gordhan said he is hopeful that a different culture would be created for the way public assets and institutions are dealt with.
Bailouts for SAA
Gordhan said bailouts for SAA cannot be ruled out going forward, adding that he recently met with the new board which seems to be getting a “better handle” on the business. “It’s going to take a few years to get right and they are going to require a bailout of sorts as we go forward. More capital needs to be injected to stabilise the airline.”
The airline revealed to Parliament that its budgeted loss forecast for 2016/17 is R3.5bn, from an earlier estimate of R1.7bn, Fin24 previously reported.
In September, the government granted SAA an additional going-concern guarantee of R4.7bn, increasing its total guarantees to R19.1bn.
READ: Letter from Gordhan: SAA to get new CEO soon
Recent reports reveal that Gordhan sent a letter to Speaker of the National Assembly Baleka Mbete, indicating that the process of appointing a chief executive for the airline will be finalised by the end of March.
“The board is in the process of interviewing candidates; hopefully sooner rather than later we will get some answers,” Gordhan told journalists about the new appointment.
ALSO READ: 6 reasons listed why court must declare SAA's Dudu Myeni delinquent
Civil rights body the Organisation Undoing Tax Abuse and the SAA Pilots Association recently filed a court application to have SAA chairperson Dudu Myeni declared a delinquent director.
If they are successful in their application, Myeni will not be allowed to be appointed as an executive of any organisation in South Africa for a minimum of seven years. The bodies listed six allegations related to botched deals of the airline which happened under Myeni’s watch as reasons.
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