The ANC is firmly opposed to liquidating SAA, but it has to walk a tightrope while voicing its views, as the final decision rests with the business rescue team appointed to assess and decide the airline’s fate.
Addressing members and supporters yesterday at the party’s 108th birthday rally in Kimberley, Northern Cape, President Cyril Ramaphosa said the fact that SAA had been put under business rescue to restructure and return it to financial sustainability was “a demonstration of both the depth of the crisis and the determination of our government to decisively address it”.
The administrative, operational and financial difficulties in key state-owned enterprises (SOEs) such as SAA and Eskom, said Ramaphosa, had a severe impact on broader economic growth and transformation.
The movement must undertake a thorough and sober assessment of the state of our SOEs and make clear decisions about what must be done
Cyril Ramaphosa - ANC President
“The movement must undertake a thorough and sober assessment of the state of our SOEs and make clear decisions about what must be done to place these entities back on a sustainable path,” he said.
READ: SAA desperate for promised R2bn from state
Although the party could influence government, which could in turn nudge the business rescue team in a particular direction, the decision is now in the hands of the rescue practitioner who was appointed last month to take over the operations at the flailing carrier.
the ANC does not want to kill off SAA
Paul Mashatile - ANC Treasurer General
According to reports, the business rescue team of Les Matson and Siviwe Dongwana also favoured the approach to save SAA, but critics of the national carrier preferred that it shut down because it had collapsed due to corruption and maladministration, which made it costly to the fiscus. The carrier has received numerous financial bailouts from government.
ANC treasurer-general Paul Mashatile told City Press on the campaign trail in Kimberley that “the ANC does not want to kill off SAA”.
Mashatile said the party backed government’s efforts regarding business rescue.
“Our overriding approach is to save the airline, make it operate better and cut costs. Our approach as the ANC is not to kill the airline.
“SAA may have to change the way it operates to be profitable. There may be things that it may offload that create problems for the business of the airline, and things that are working well may consolidate,” he said.
The ANC’s determination to save SAA was recorded at its national executive committee (NEC) meeting on Monday, where the party’s top brass received a report on the business rescue practitioner’s work.
NEC members heard that the business rescue team preferred not to liquidate SAA, opting to restructure it to make it profitable and viable, which would mean looking at restricting its business operations.
When the floor was opened for input, NEC members grappled with the implications of both restructuring and liquidation, with a clear bias towards restructuring.
Others opined that it may be better to sell off SAA and start a new national carrier on a clean slate, with a private equity partner owning the majority share.
“That could mean shedding jobs or forcing SAA to withdraw from certain routes that seem unprofitable,” said one member of the NEC.
However, the ANC is cautious about not being seen as dictating the work of the business rescue team as that could compromise the team’s independence and create an impression that there was political influence in their work.
“The NEC will not be required to get into the technical and operational details. The NEC will make a strategic decision on the endgame,” the member said.
Another comprehensive presentation on the options available for SAA will be made by Public Enterprises Minister Pravin Gordhan at the next ANC NEC lekgotla, after which the party will outline its final strategic approach towards SAA.
“Strategic consideration could include limiting the impact on employment, even though there may be some job losses, and also mitigating against major risks and damage for SAA. The main feeling was that we need to restructure SAA. Those tasked with implementation will work out the granular details,” said a senior party leader.
Although the collapse of governance at SOEs has been widely blamed on entrenched maladministration and corruption over the past 10 years under former president Jacob Zuma, some NEC members preferred a much broader diagnosis, which meant “looking at the trends and patterns over time”, as limiting the problems to Zuma’s era might not provide a clear picture.
“There must be something bigger that put us where we are today. The 10 years might have only made it worse,” said another NEC member.