With another R5 billion bailout on the cards for failed airline SAA, government is throwing more money into the black hole that has already sucked up over R57 billion of taxpayer’s money over the past 20 years.
This is according to the Free Market Foundation, which said that the only piece of good news around the new bailout is that it is happening through the right channels – heading to parliament to approve, instead of happening behind closed doors at National Treasury.
“A first – the R5 billion will be made via an Appropriation Bill which means that parliament must debate and decide on whether SAA should receive the funds rather than, as with previous bailouts, the decision resting with the Treasury and finance minister with no public scrutiny,” the group said.
“This means there is ample opportunity for the spotlight to shine on the many billions that have been poured into SAA, with what result and at what opportunity cost.”
The FMF said it was a “brilliant move” by finance minister Tito Mboweni, having put the decision “where it should be” – open to public scrutiny and comment in parliament.
The group published a document detailing all the financial assistance given to SAA since 1999, which, including cash and guarantees, amounts to R61.8 billion.
In total, SAA has received government financial assistance of a staggering R57.8 billion. In the last financial year, SAA made a loss of R5.7 billion and is on course for greater losses in 2018/9, the Free Market Foundation said.
SAA has yet to release audited financial statements due to disputes with the Auditor General.
The airline recently staved off calls and court action for business rescue, with promises of an immediate attempt to find an equity business partners.
“Since then, SAA has been remarkably silent on this matter,” FMF said.
Mboweni said it would be difficult to find a private equity partner for SAA and made a case for selling the national carrier.
“I doubt you are going to find a candidate to come in”, he said, adding that any potential investor would immediately be taking on almost R22 billion in debt.
“Nobody has that kind of money,” he said.