Gordhan: SAA business rescuers must account for R5bn spending
Public Enterprises Minister Pravin Gordhan says the business rescue practitioners at South African Airways (SAA) must account for the R5.5 billion spent since the start of the year.
Gordhan faced the parliamentary committees charges with overseeing his department on Wednesday to provide an update on the country’s state-owned enterprises.
He admitted there are some red flags around the airline’s spending.
“An amount of R5.5 billion, from two different groups, was made available from December and soon thereafter for post-commencement finance and so R5.5bn has been spent in the last five months - something that we have been questioning.
“These are matters of accountability that we are getting into and we have been interrogating for a while.”
Gordhan pointed to the fees paid to consultants during the past five months as particularly concerning.
“For example, an American aviation consultant was brought in.
“That firm did work that resulted in fees something like R30m to R35m being paid to them, but we haven’t seen the product of what they have done. And so we want full access to that information so we can evaluate if we have value for money in that case.”
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The aviation industry has taken a big hit in the coronavirus crisis, as lockdown measures and travel restrictions bite. In South Africa, Comair announced on Tuesday that the company has entered business rescue amid mounting losses due to the Covid-19 outbreak.
Gordhan said a new airline could replace a failed SAA.
“If this wind down process that the business rescue practioners seem to be on, at the moment, continues in the manner in which they propose then it will not serve the original objectives that we have set for the business rescue process.”
A failure to salvage SAA could see some 5 000 people lose their jobs.