Govt must consider closing SOEs that serve no economic purpose - Busa

Govt must consider closing SOEs that serve no economic purpose - Busa

Business Unity South Africa (Busa) wants government to consider closing down state-owned enterprises which serve no social or economic purpose.

OR Tambo SAA - AFP

CEO Cas Coovadia was reacting to the news of a strategic equity partnership for national air carrier South African Airways (SAA).

The Takatso Consortium will hold a 51% stake in SAA, while the government holds a minority shareholding of 49% in the business.

"We also remain clear that the government must continue to review its SOEs, with a view to rationalisation to ensure fewer SOEs that are efficient and sustainable," says Coovadia.

"The closure of SOE’s that serve no social or economic purpose must also be considered."

Nevertheless, Coovadia has welcomed the Friday morning’s announcement.

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"BUSA has consistently been of the view that SAA could not survive or become sustainable without a private equity partner, so that the airline is not continually dependent on the fiscus.

"We welcome the decision to appoint the Takatso Consortium as the private equity partner for SAA. We also welcome the announcement that the Takatso Consortium will purchase a majority stake in SAA.

"Busa remains steadfast in its position that partnerships between the private sector and government in non-strategic SOEs is the appropriate way to go."

Trade union Solidarity has also welcomed the news that SAA would be privately-owned.

In 2019, Solidarity filed an application to have the airline placed under business rescue.

The union’s Connie Mulder says the union is cautiously optimistic that the deal will lead to a brighter future for SAA.

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