SAA fiasco highlights state capture’s lingering effects

How could Cyril Ramaphosa’s government handle the SAA matter in such a sorry manner? It could be because the chief himself ignores the stuff that matters.

Or because the cabinet lacks the interest and capacity to handle easy matters, let alone complex issues. Perhaps it’s because public enterprises minister Pravin Gordhan is a strong character, feared by many, including Ramaphosa himself.

Nobody wants to pick a fight with a former chief taxman or someone who single-handedly nailed opponents such as Jacob Zuma and his friends using hard-to-find financial information.

I served as his media adviser and spokesperson for 12 months from 2019. I wrote and released some statements about the airline’s revival during the early stages of the business rescue process.

Back to the substance of the matter: the tragedy is how inept the department of public enterprises (DPE) — the machinery — has been under Gordhan. It allowed him to become a feudal lord to whom no-one could say no.

Gordhan knew my views about a domesticated department that feared him and advisers who followed him like servants in a royal house. They abdicated their duty to the ministry and instead sought to serve the man.

The warped version of “servant leadership” is precisely why the state was captured under that despicable man from Nkandla, and it was odd, and even ironic to me, how Gordhan could be pinned to the same pole as a feared boss. The intended outcome might not have been that of the state capturers, but the process was the same.

Gordhan would have pursued the SAA revival route in the political interest of Ramaphosa, who, in 2020, said he was “gung ho” about the airline’s revival. Gordhan bashed everyone along the way, including then finance minister Tito Mboweni, believing he was pursuing a Ramaphosa- and cabinet-sanctioned holy war.

SAA took up too much of Gordhan’s time, and that of the people around him. It defied the proverbial 20%-80% rule: focusing on the 20% that returns 80% of the result. The opportunity cost was not just Eskom, which already was on life support when Gordhan got to the DPE in 2018. The failure is demonstrated in the financial collapse of Transnet, which was on a much better footing in 2018. In 2020 it was a big deal at the DPE that Transnet would be able to pay a dividend to the state the following year. That never materialised, and the entity made an about turn into the deep throes of financial misery.

The government, broadly, never understood the apparent debt cliff facing Transnet then, never mind how the wheels subsequently fell off. One can also see the opportunity cost in the collapse of Denel, a company with a deep order book and world-renowned engineering capacity, in 2018. The DPE’s administrative capacity was decimated under the Zupta regime.

Gordhan didn’t rebuild it. People brought from the private sector left in tears, mauled by a rapacious system that couldn’t brook dissent. There were a handful of engineering and finance experts known as Thuma Mina deployees whom the private sector made available to the DPE. They all left almost as soon as they arrived.

But the biggest issue was the loss of senior technocrats in transport and engineering in the heart of the DPE. That loss meant the ministry — well, Gordhan himself — took on most of the work. The ministry is a body of 10 people at most, who do not have enough hours in their day to run the department that manages possibly 80% of the economic infrastructure.

Gordhan had a respectable time at the

Treasury. One of the reasons is that it has deeply rooted values, and civil servants are acutely aware of their separation from the finance ministry. They tend to push back against politicians.

At the South African Revenue Service Gordhan was a star due to his driven nature and a robust executive layer around him, something he did not create at the DPE. At Sars, people like Ivan Pillay made the institution sing. Gordhan also had

Thabo Mbeki as his boss, with the likes of Trevor Manuel in the finance ministry.

The SAA debacle is a revelation that the culture of domestication in the public service remains long after the Zuptas’ departure. It also shows how vulnerable we remain to state capture 2.0.