Editorial: Dump Dudu, save SAA

2017-08-27 06:00

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The government is throwing good money after bad by earmarking its R13bn stake in Telkom for sale to get money to bail out SAA yet again.

Telkom is a profitable business that has seen its share price appreciate over the past five years.

The current board and management have turned the company into a machine that its peers on the JSE are now envious of. The telecommunications company also pays the government dividends.

In addition, as the backbone of our communications infrastructure, Telkom is strategically important to South Africa’s development goals. It would be downright foolish to dump the state interest for short-term gain.

On the other hand, our national carrier has been posting billions in losses since 2012 and has nearly R20bn in government guarantees.

SAA has provided the state with little, if any, returns.

Government needs to either radically improve the governance and management of SAA, which it has repeatedly failed to do, sharply downscale the airline to try to achieve profitability and sell off a strategic stake – or it needs to get out of the airline business completely.

Unlike in the case of Telkom, SAA is of little strategic value to the state. There is no reason why the taxpayer should be the risk-taking investor in the running of this business.

The first step that Finance Minister Malusi Gigaba should take is to dump the slimy and monumentally inept Dudu Myeni as board chairperson. That would give the highly competent board and the incoming management space to effect a turnaround without being impeded by a self-serving Marie Antoinette.

It would also reinstil the confidence of the investment and banking communities. An SAA that is on a turnaround path would then be attractive to strategic partners and/or buyers.

Without Myeni at the helm, the leadership of SAA would then also be able to deal with legacy issues such as corrupt activities and dodgy evergreen contracts.

We understand that it will require courage on the part of Gigaba to get rid of someone who puts a smile on the face of the person who is responsible for his being able to keep Lady Noma in the lifestyle to which she has become accustomed.

But he must put South Africa first.

Read more on:    saa  |  dudu myeni

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