Photo by: Duane Daws
Finance Minister Pravin Gordhan announced on Wednesday that advisers will be appointed to provide technical assistance to government as it considers the possible realignment of its shareholding in State-owned airlines.
Delivering the 2016 Medium-Term Budget Policy Statement he noted that several State-owned companies could pose risks to the public finances.
“In particular, government is closely monitoring South African Airways (SAA), the South African Post Office, the South African National Roads Agency and Eskom, with the aim of stabilising these entities and mitigating any risks that may materialise,” he said.
In September, a new, full-strength board was appointed at SAA. The board has been tasked with returning the airline to financial sustainability, and is required to fill vacant executive management positions.
Speaking to the media at a press conference held prior to the Minister’s speech, National Treasury director-general Lungisa Fuzile stated that government could not give money to SAA, or any other government entity, without knowing that a strong effort had been made to fix governance within that entity.
“[SAA] needs a strong board and competent executives who know what they are doing and who do what they are supposed to do,” he said, highlighting that SAA should focus on cutting costs and ensure that revenues rise faster than costs to ensure the business is financially sound.
He pointed out that SAA had guarantees of R19.4-billion and said that government needed to evaluate the best way to be involved in the airline industry.
“SAA needs to be a strong entity. In the long term are a range of options, such as having a strategic equity partner that would serve the company objectively and ensure that South Africa has a financially strong airline that is run appropriately,” he said.
Dudu Myeni was reappointed chairperson of SAA in September.