No bailouts for SAA, Post Office

2014-10-22 14:32

The country’s embattled state-owned entities (SOEs), including SA Airways and the SA Post Office (Sapo), will not be bailed out, according to Finance Minister Nhanhla Nene.

Instead, they will be restructured to make them financially sustainable, he said in the Medium-Term Budget Policy Statement (MTBPS), tabled at Parliament today.

“Over the medium term, any funding of state-owned companies will be contingent on the implementation of sound restructuring plans with strong government oversight.

“Given fiscal constraints over the next two years, capitalisation will only be funded by the sale of non-strategic state assets, and will not be drawn from tax revenue, or added to the debt of national government.”

Nene said SOEs should operate from the strength of their balance sheets.

“In line with the successful restructuring of the Development Bank of Southern Africa, reforms are being undertaken at SA Airways, SA Express, the SA Post Office and the Land Bank.”

Earlier in October, MPs heard the cash-strapped, strike-hammered post office was on the brink of collapse.

There have also been various probes into the mismanagement of funds at the Sapo.

National carrier SAA has consistently pleaded with Treasury over the years for a cash injection, and has applied for a government loan guarantee so it can continue operating as a going concern.

Two years ago, Treasury approved a R5 billion guarantee for SAA.

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