SAA MAY GET A STRATE­GIC PART­NER

Pub­lic En­ter­prises Min­is­ter Lynne Brown be­lieves the na­tional car­rier can no longer rely on bailouts and must be able to sus­tain it­self

CityPress - - Business - CAI­PHUS KGOSANA cai­phus.kgosana@city­press.co.za

The gov­ern­ment is think­ing of bring­ing in a “strate­gic part­ner” from the pri­vate sec­tor to help it run trou­bled na­tional car­rier SAA. Pub­lic En­ter­prises Min­is­ter Lynne Brown told City Press in an in­ter­view that this was one of the op­tions be­ing con­sid­ered to help turn around SAA.

“There is a pos­si­bil­ity of bring­ing in a strate­gic part­ner. That must be in­ves­ti­gated be­cause we have to check whether there’s ap­petite in the mar­ket for a por­tion of the air­line,” she said.

How­ever, she could not di­vulge more de­tails about the kind of part­ner and ex­actly how much of the air­line could be sold. Brown also said the idea of bring­ing in a strate­gic part­ner to help run the air­line did not mean that gov­ern­ment was chang­ing its pol­icy on the pri­vati­sa­tion of state owned com­pa­nies.

“It’s not our pol­icy to pri­va­tise. If you look at case stud­ies of coun­tries where pri­vati­sa­tion has hap­pened and look at the air­lines ... in New Zealand and Aus­tralia they even­tu­ally came back to the coun­try. “It’s not as vi­able,” she said. But given the cur­rent fi­nan­cial crunch in gov­ern­ment, SAA could not con­tinue to rely on bailouts and must at some point be able to sus­tain it­self off its bal­ance sheet.

Brown said she was hor­ri­fied and was forced to act when SAA failed to pro­duce its an­nual fi­nan­cial state­ments, a move that led to Fi­nance Min­is­ter Nh­lanhla Nene de­clin­ing its re­quest for fur­ther fi­nan­cial guar­an­tees.

“There are in­ef­fi­cien­cies within the sys­tem and that’s why when they had to go to the AGM and still didn’t have an an­nual fi­nan­cial state­ment, I thought, that’s it; and a cou­ple of days later the min­is­ter of fi­nance wouldn’t grant them a guar­an­tee. That was it for me,” she said.

An in­ter­min­is­te­rial com­mit­tee con­sist­ing of Brown and Nene is now in place to re­view the SAA model and draw up a turn­around strat­egy, of which there have been many. Of­fi­cials from Pub­lic En­ter­prises and the Na­tional Trea­sury meet once a week to share ideas and draw up plans

OP­TIONS Lynne Brown to try to save SAA.

The min­is­ter con­ceded that for SAA to be turned around, it would have to re­view all its routes and dump those that are not prof­itable, in­clud­ing some of those con­sid­ered by the state to be strate­gic routes. “We must relook ev­ery sin­gle route we have. I think you need to re­view ev­ery route and if it’s a de­vel­op­men­tal route, we have to make a decision as the state [on keep­ing the route],” she said. On Thurs­day Brown moved to save the board from col­laps­ing after six board mem­bers re­signed fol­low­ing clashes with chair­per­son Dudu Myeni. The min­is­ter trimmed the board, re­duc­ing it to six mem­bers – four non-ex­ec­u­tive direc­tors and two ex­ec­u­tive direc­tors.

Brown said the pre­vi­ous board was wrought with fac­tions and after be­ing in­un­dated daily with let­ters of ac­cu­sa­tions and counter ac­cu­sa­tions from SAA board mem­bers, she had reached the con­clu­sion that their re­la­tion­ship had ir­re­triev­ably bro­ken down and ac­tion had to be taken. “The board has been fac­tion­alised. It has in­cred­i­bly in­tel­lec­tu­ally as­tute, hard-work­ing, bright mem­bers. In­di­vid­u­ally they were great peo­ple, but col­lec­tively they just did not gel. It’s a fac­tional thing.”

She de­fended her decision to re­tain Myeni as chair­per­son and Yakhe Kwinana as chair­per­son of the au­dit com­mit­tee, de­spite other board mem­bers blam­ing them for the woes of the board. Brown said they had vast in­sti­tu­tional mem­ory.

She de­nied that her decision to keep Myeni was in­flu­enced by her close­ness to Pres­i­dent Ja­cob Zuma. Myeni is the chair­per­son of the Ja­cob Zuma foun­da­tion.

“I feel damned if I do, damned if I don’t. If I chose to [re­tain] any­body on that board I think it would have come with a lot of ques­tions. Of course peo­ple are say­ing I’m fac­tional but I’m mak­ing a decision based on in­sti­tu­tional mem­ory.”

In Jan­uary six board mem­bers made rep­re­sen­ta­tions to Brown’s pre­de­ces­sor, Malusi Gi­gaba, about poor gov­er­nance at the air­line.

They ac­cused Myeni of un­der­min­ing the board with re­gard to the pro­cure­ment of a fleet of nar­row body air­craft, con­duct­ing se­cret in­ves­ti­ga­tions into board mem­bers and CEO Monwabisi Kalawe, and in­ter­fer­ing in the work of board com­mit­tees.

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