Urgent intervention required at SAA

12 November 2015

I have today written to the Minister of Finance, Nhlanhla Nene, requesting that he appear before Parliament to brief it on whether or not SAA Chairperson, Dudu Myeni’s intentions to procure more aircraft in defiance of Treasury’s advice is in contravention of PFMA regulations. Further to this, Minister Nene must provide assurances that he does not support this procurement and commit to suspending Ms Myeni should she make good on her threats to buy more aircraft for a state entity that simply cannot afford it.

This comes after today’s reports that Myeni is brazenly intent on bulldozing the procurement of R5 billion worth of Airbus aircraft regardless of Treasury warning against the calamitous consequences this deal will have for the airline and the fiscus of the country. The Director-General of Treasury has warned the management of SAA what the consequences of this move will be. Despite this warning, the Finance Minister has not taken any steps against Ms Myeni or forced her to abandon this ludicrous deal.

Before any form of procurement can take place, an application in terms of Section 54 of the Public Finance Management Act needs to be submitted to Treasury for approval. Chairperson Myeni is flagrantly pursuing this aircraft deal without having applied to Treasury for approval. This is the sort of contempt for the Rule of Law and due process we have come to expect from acolytes of Zuma Inc.

This deal is ill-conceived and indicative of the poor management that has grounded our carrier for years. Indeed the management of SAA is in complete disarray with a number of senior officials resigning and threating to resign. This must be a clear indication that SAA is not in any position to make such a large procurement which will further compound the financial constraints of the airline. 

SAA has already been bailed-out by nearly R7 billion this year alone, where will the utility find this additional cash reserves? 

Minister Nene must act swiftly to prevent Ms Myeni from going ahead with this deal that will cost the airline and the country dearly. We cannot allow Ms Myeni to strong-arm Treasury or the Minister. We have severe financial constraints in Higher Education as well as an imminent drought  that will require intervention by Treasury and Minister Nene must remain mindful of that.

Issued by Natasha Mazzone, DA Shadow Minister of Public Enterprises, 12 November 2015