Cosatu slams use of PIC to help SAA

COSATU has strongly objected to the use of workers’ money in the Public Investment Corporation (PIC) being used to bail out SA Airways, likening it to throwing money into a bottomless pit.

The labour federation’s tough stance in Parliament yesterday came after a strategic expert on state-owned entities (SOEs) called on the government to put SAA into business rescue.

National Treasury has injected R10 billion into SAA to keep it afloat and pay the banks it owed.

Cosatu’s parliamentary representative Matthew Parks told members of the standing committee on appropriations that the airline needs to be salvaged.

However, he warned that there was a tendency by government to use the PIC to bail out ailing SOEs.

Parks said one of the things the gover nment could do urgently was to engage Angola on the R600 million the country owed to SAA for airline tickets.

Angola, Nigeria and two other African countries owe money to SAA for unpaid tickets but Angola remained the largest debtor.

SAA has raised the issue in Parliament in the past and said it was trying to recoup the money.

Parks also warned against attempts by President Jacob Zuma to tap into the Unemployment Insurance Fund (UIF) to get R50bn to finance free education.

This f oll owed re por t s that Zuma was planning to announce free education and get the money from UIF.

Parks said the problem was the looting of SOEs, including Eskom and SAA.

He said they supported the idea of the PIC investing in SOEs, but there must be clean governance.

“On the PIC bailout we don’t want to see SAA bailout. You can’t have bailout where looting is taking place. We support the PIC investing in SOEs, but you must have clean governance. SAA is in a precarious state,” said Parks.

He said for the airline to be turned around there needed to be a forensic audit into what has been going on.

“If SAA wants a bailout it must deal with wasteful expenditure,” he said.

Cosatu members were angry, he said, about the using of PIC as a piggy bank.

Thabang Motsohi of Lenomo Advisory, a strategic expert in SOEs, told Parliament that SAA needed to be put into business rescue to survive.

“I see the following options for SAA,” he said. “Put it into business rescue and restructure it aggressively. Under this option, all legacy agreements are up for revision.”

He said a second option would be to restructure the airline as proposed within a tight schedule. “Pursue aggressive restructuring and re-organisation as currently planned and execute it to a tight schedule.”