Mbalula makes transparent moves
Minister says he followed due processes in appointing Prasa administrator
FORMER SAA board chairperson Dudu Myeni allegedly ignored former finance minister Nhlanhla Nene’s instructions to sign the SAA/Airbus deal – she also allegedly defied SAA’s own internal legal advice to sign the deal.
SAA lawyers warned that failure to sign the deal would introduce “a new risk of a breach of agreement and consequently a potential trigger of material adverse effect and potential cross default under the funding and aircraft lease agreements”.
This was revealed in the North Gauteng High Court in Pretoria yesterday where Myeni is defending an application by the Organisation Undoing Tax Abuse (Outa) and the SAA Pilots’ Association (Saapa) to declare her a delinquent director.
The parties allege that Myeni was responsible for plunging the national airliner into a financial crisis.
Yesterday, Outa and Saapa legal counsel Carol Steinberg produced a series of correspondence between Myeni and Nene about the swop transaction.
Nene had officially approved the deal in July 2015 in which SAA would lease five A330 aircraft from Airbus – a deal whose lifespan would last for 12 years. The aircraft would have been used on international routes between Joburg/Dubai and other European countries.
It was a conditional deal – South Africa would have been required to pay an amount of $17 million (R258m) and an additional $100m for reneging on the swop transaction.
Nene approved the deal in July but Myeni allegedly refused to sign it.
In December 2015, Nene warned: “As SAA currently does not have the
TRANSPORT Minister Fikile Mbalula yesterday said there was no malice in the decisions he has taken at Passenger Rail Agency of South Africa (Prasa), saying history would absolve him.
“I am informed by the state of the entity. I am informed by ineptitude. I am informed by roguishness and by the place that has totally collapsed and which I characterised as a broken place,” Mbalula said.
He made the statement when he briefed the transport portfolio committee on the appointment of Prasa administrator Bongisizwe Mpondo and plans to address challenges at the entity.
The briefing comes amid the minister facing a legal challenge from civil society coalition #UniteBehind.
Mbalula said the auditor-general had issued reports in successive years that were not good about Prasa and that there had been infighting between ministers, the boards and management.
“The things we are answering with the director-general date back to 2012,” he said.
Earlier, Mbalula told the committee about how Prasa had over a period of five years, seen its revenue decline by 48%, resulting in its operating deficit reaching R1.8 billion.
The entity’s operational performance had continued to decline with notable stagnation in 2015 and 2016 of its on-time performance, and its safety record plunging to unprecedented levels in 2016.
He told the MPs that he had followed the due process in appointing Mpondo after the then interim board did not perform its duty.
He then explained in detail the process he followed including consulting President Cyril Ramaphosa, National Treasury and the Cabinet before dissolving the then board and appointing
Mpondo late last year.
Mbalula said in less than a year being at the department, he had taken decisions to fix the ailing entity, including closing the Cape Town central line corridor for refurbishment.
“I would rather be insulted by the communities for the truth than lie to them saying I will fix this today and then tomorrow it goes down,” he said.
Mbalula said the biggest success of Mpondo’s stay at Prasa would be to deal with malfeasance and lack of corporate governance – which would not be fixed in a year.
He also said he wanted Prasa to have “some level of stability within a year”.
“I have no qualms with people who take me to court,” the minister said.
“I’m worried by the fact that I have to go to court and defend the case and all of that. Whose resources I am using,” Mbalula said.
“I never said I will not appoint a board at Prasa. In fact, I am going to appoint it and it is going to be transparent,” he said.
He said appointing a new board would not help as it was the case with the interim board when he found the situation had regressed further after entrusting it with people of integrity.
“I want those things gone. I want to see stability at Prasa,” Mbalula said.
Committee chairperson Mosebenzi Zwane said his committee would work with other institutions such as the auditor-general and others to play their oversight role.
However, he said they should be fair to anyone wanting to take Mbalula to court if they wanted to do so.
“It is their right and we respect that. That does not mean you must not do your work. Where we think you are not right, we will tell you. When you are right, we will stand behind you,” Zwane said.