‘Fiscal drain’: SAA has cost SA R49 billion, Godongwana tells parliament

Finance Minister Enoch Godongwana has labelled the South African Airways (SAA) as a fiscal drain, adding the disposal of the government’s shareholding in the airline is justified.

Godongwana and Public Enterprises Minister Pravin Gordhan briefed parliament’s Standing Committee on Public Accounts (Scopa) on Tuesday on the disposal of the majority of the government’s shareholding in SAA, the Annual Report of SAA and the financial statement.

The finance minister said there was no doubt that SAA had been a fiscal drain.

“Since it was taken out of Transnet in 2007/8 it has cost the state, to date, R49 billion. So, there’s no doubt that it has been a fiscal drain,” said Godongwana.

The two ministers further clarified reports that there was tension between the two departments amid the sale of the airline, saying disagreements did not mean there was tension.

This after reports the two ministers publicly contradicted each other over the sale of 51% of the SAA shares to the Takatso Consortium, after National Treasury director-general Dondo Mogajane, in a letter to Scopa, said the department was not involved in the selection of the private consortium to take over SAA.

In a written reply to Scopa, dated 7 April 2022, Gordhan denied Mogajane’s claim that the Treasury never played a role in the selection of Takatso.

Gordhan and Godongwana told Scopa today that these were matters of detail, which only required clarification on both sides.

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“There is no tension. In the interaction between Treasury and DPE, when a proposition is put forward, there will be lawyers involved, opinions will vary until there’s clarity and ultimately, we came to a consensus. Treasury colleagues are not necessarily involved in every step of the operational detail, so in the process of interaction between DPE and Treasury, all sorts of questions will be asked and responses will be provided, so that there’s adequate understanding on both sides of the facts, and ultimately alignment,” said Gordhan.

“This is what the minister and I are indicating to you, that two government departments are fully aligned on this proposition. These are Cabinet decisions that are being implemented. All the necessary work is being pursued in terms of that particular mandate so there will be healthy exchanges and debates because no two lawyers are going to agree in the first instance on a complex issue, but once there is sufficient room for clarity, you can get the necessary alignment.”

Godongwana echoed Gordhan’s sentiments and said the operational responsibility of dealing with all of the details is the department of public enterprise, which has taken all the necessary steps following Cabinet’s approval of the SAA sale.

“I agree with the minister; when these things happen, it doesn’t mean there is infighting. These are matters of detail, it’s in our nature to ask questions and people ask answer. It doesn’t mean any contradiction,” said Godongwana.

Additional reporting by Thapelo Lekabe