SAA s R1.5bn advance may delay recovery ’
A government decision to advance R1.5bn to SAA before parliamentary processes on the distribution of funds to departments and entities are completed is likely to end up in court, which could further hurt the recovery efforts of the embattled state-owned airline.
This comes as the government tries to revive the national carrier, which has not turned a profit since 2011, costing taxpayers on average R6bn a year since then.
Bloomberg reported at the weekend that in addition to buyers for a stake in SAA, the government is also seeking partners for subsidiaries such as low-cost airline Mango and catering unit Air Chefs.
The result will be a number of private sector entities working with various parts of SAA whenever it resumes operations, Bloomberg reported, citing public enterprises minister Pravin Gordhan.
The minister was quoted as saying the government had 31 expressions of interest in SAA and is whittling down the list.
It emerged last week that the ailing national carrier, which has been grounded for the better part of 2020 due to Covid-19, received about 10% of the R10.5bn it was allocated in the medium-term budget policy statement. This was before the appropriation bill, which allows for the distribution of money from the national revenue fund for requirements of the state, was approved by parliament and signed by the president.
In allocating the funds, the government seemingly relied on a section of the appropriation act that states that before the bill is introduced in parliament, the minister may approve expenditure if it cannot reasonably be delayed without negatively affecting service delivery.
The medium-term budget policy statement, tabled by finance minister Tito Mboweni in parliament in October,
detailed cuts in the expenditure of various departments of about R7bn as a contribution to the SAA business rescue plan. The airline has lost more than R18bn since financial 2015.
The National Assembly approved the second adjustments to the appropriations bill on Friday, but this still requires the National Council of Provinces to concur. The council will deliberate the bill this week.
The standing committee on appropriations recommended that Mboweni review the sources from which money had been withdrawn for funding SAA and find alternatives that do not undermine service delivery and development programmes.
DA MP and member of the standing committee on public accounts Alf Lees said the advance to SAA was illegal.
“It cannot be that the sovereignty of parliament to determine the appropriation of funds can simply be ignored and money spent at the whim of an ANC minister.
“Once paid to SAA there can be no doubt that it will be impossible to recover this money from the bankrupt airline even if parliament does the right thing and fails to appropriate this immoral bailout,” Lees said.
He said the DA would refer this alleged premature payment to the auditor-general.
“We will insist that ministers Mboweni and Gordhan be held personally accountable for any unauthorised and illegal advance payments to SAA ... We are also getting an urgent legal opinion, which may result in us asking for an urgent interdict,” Lees said.
Department of public enterprises spokesperson Richard Mantu said the payment to SAA was legal.
“The funds availability was done in line with applicable legislation and rules. The funding of the restructuring of SAA is in line with the commitment made on December 6 2019 when the airline was placed into business rescue, to see through the business restructuring process.”