Public Enterprises Minister Pravin Gordhan says a restructured South African Airways (SAA) will not be dependent on the national fiscus as it will be structured according to the Telkom model.
He was taking part in a debate in the National Assembly on Thursday about the financial burden of sustaining non-profitable State-Owned Entities. Some opposition parties have criticised the multi-billion rand bailouts or guarantees given to some of the financially struggling entities.
Gordhan reiterated that the latest allocation to the national carrier during last week’s Medium Term Budget Policy Statement is not a bailout. He says it will pay for retrenchments, voluntary severance packages and to refund customers who bought tickets but couldn’t fly.
“We are going to restructure SAA there will be a new airline that emerges which will not be dependent on the fiscus and that will indeed follow the Telkom model that we have all made reference to. SOES, in general, will be re-purposed, redirected and re-ogarnised in order to be an exemplary set of institutions but this will take time, it will take hard work, we will have to undo the damage of state capture.”
Last week, in the Medium Term Budget Policy Statement, Mbooweni announced that SAA would be granted a further R10.5 billion bailout and that government aims to stabilise the ratio of debt-to-Gross Domestic Product at around 95% within the next five years.