POLITICS

Parliament's legal advisors must scrutinise basis of SAA bailout – Alf Lees

DA MP says they need to get to the bottom of whether Gigaba’s use of the PFMA is legitimate

DA to request Parliamentary legal opinion on Gigaba’s SAA bailout

2 October 2017

Finance Minister, Malusi Gigaba’s, use of section 16 of the Public Finance Management Act (PFMA) to bail out South African Airways (SAA) again, to the tune of R3 billion, could have been avoided and may have been unlawful.

The DA have therefore written to the Chair of the Standing Committee on Finance, Yunus Carrim, to request that a legal opinion on this be obtained from the Parliamentary legal advisors.

A number of instances clearly showed that SAA was in deep trouble yet again. These include:

- As early as 27 June, a 12-month cash flow analysis clearly showed that SAA would not have enough cash to pay suppliers in full in July, August and September;

- In late June, Citibank indicated that they would not agree to extend the payment of the R1,8 billion owed to it beyond the end of last month; and

- Media reports on 23 August also indicated that Gigaba and the Cabinet were fully aware then of the “unwillingness” of some lenders to “further extend funding to the airline”.

The DA believes that not only were these funding requirements foreseeable, but had in fact been foreseen at least three months beforehand and therefore, there was more than enough time available for a Parliamentary appropriation of funds.

Parliament’s legal advisors need to get to the bottom of Gigaba’s use of the PFMA to bail out SAA by raiding the public purse and we trust that the legal opinion will do just that.

Issued by Alf Lees, DA Shadow Deputy Minister of Finance, 2 October 2017