'There are definitely conditions' in SAA bailout - treasury

2017-10-15 06:00
Malusi Gigaba. (Pic: Gallo Images)

Malusi Gigaba. (Pic: Gallo Images)

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The R5.2bn in bailouts transferred to SAA so far this year comes with conditions, despite perceptions that the funds were handed to the bankrupt airline with no strings attached.

“It is not free money,” Treasury director-general Dondo Mogajane told City Press in a telephonic interview on Friday.

“There are conditions. SAA must meet them. One of the broader ones is that the airline has to appoint a chief restructuring officer; it did that. The officer will be starting work on October 15.”

Mogajane was unable to say who the person is.

“In the action that we took to recapitalise SAA for the second time around, we put conditions around certain deliverables regarding its long-term turnaround strategy.

“It is not true that there no conditions. There are definitely conditions,” he insisted.

A plus factor was that the new CEO, Vuyani Jarana, was starting on November 1.

He said that government, as the shareholder, and Finance Minister Malusi Gigaba, intened to ensure that problems with the board were addressed.

“SAA will be back on track. SAA is an issue we are focused on. We cannot afford for the airline not to get back on track.”

Mogajane is currently in Washington with Gigaba and Deputy Finance Minister Sfiso Buthelezi. They are leading a Treasury delegation to the annual meetings of the International Monetary Fund (IMF) and World Bank group.

Government has a small shareholding in both the IMF and the World Bank.

The meetings began on Friday and end today. SA Reserve Bank (Sarb) governor Lesetja Kganyago is also attending.

At the gatherings, South Africa’s government representatives chose to meet their counterparts from four countries – Indonesia, India, China and Turkey – to hear about their development problems and how they intended to overcome these.

“We sat with them for two or three hours to understand and learn how they get it right. Turkey’s economy is growing at 3%.”

Mogajane said as part of their US trip, Treasury and Sarb officials would meet investors and members of the big three credit ratings agencies: S&P Global, Moody’s Investors Service and Fitch Ratings.

“We will update them on the 14 confidence-boosting measures that we have proposed,” Mogajane said.

“Come October 25, they should be looking forward as we will have another critical story to tell about spending, state-owned companies and how we are addressing some of the challenges we have,” he said.

He was referring to the medium-term budget policy statement that Gigaba is scheduled to present to Parliament on that day.

Read more on:    saa  |  treasury  |  malusi gigaba  |  dondo mogajane

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