SAA spends nearly R10m with the New Age

Cape Town - South African Airways (SAA) has spent R9.4m on purchasing about six million copies of the New Age newspaper, which is owned by the Gupta family.

READ: SAA responds to New Age spend

Finance Minister Nhlanhla Nene replied to a parliamentary question posed by the Democratic Alliance (DA) that since March 2011, SAA purchased 5 927 000 copies of The New Age that were supplied to domestic on-board flights, lounges and airports.

He said SAA spent R2.44m with the New Age in the 2014/15 financial year.

The newspaper was in circulation for just three months before SAA started buying the New Age and its circulation figures are not audited by the Audit Bureau of Circulations.

This comes as the SAA’s annual general meeting was postponed as it had not yet finalised their 2014/15 annual financial statements, according to the Treasury, which now oversees the state-owned entity.

Natasha Mazzone, DA shadow minister of Public Enterprises, said in a statement that she would request her counterpart, Minister Lynne Brown, to institute an independent probe into the decision making for this expenditure.

In January, SAA received a R6.5bn guarantee from Treasury, bringing the total guarantees it has been given to R14.5bn, explained Mazzone.

“Debt costs are expected to amount to R500m for the 2014/15 financial year from R250m in the previous period,” she said. “SAA reported a R2.5bn loss in the 2013/14 financial period, up from R1.7bn in the previous financial year.”

Mazzone wants the probe to investigate whether President Jacob Zuma had any influence on the agreement between SAA and the New Age, whether such spending is financially viable given the current state of SAA, and why the New Age was chosen ahead of any other national newspaper.

This is not the first time a government department or business unit has been questioned over its subscription or advertising spend in The New Age.

Fin24 reported in April that the Department of Trade and Industry had spent about R2m worth of advertising with The New Age in the last three financial years, while the Justice and Correctional Services Department spent R1.5m and the Department of Higher Education spent R2m over the same period.

Last October, the Mail and Guardian reported that former Eskom CEO Collin Matjila had signed off a R43m contract to sponsor The New Age’s breakfast briefings over a three-year period.

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