SAA still overpaying by 200% despite new CEO and Board

15 November 2018

Today the Minister of Public Enterprises, Pravin Gordhan, confirmed that fraudulent and corrupt practices at SAA are still ongoing, costing South Africans billions in tax money.

In a written response to my question, Gordhan states that “[c]orruption in procurement is a major problem in both SAA and SA Express”, adding that procurement of some commodities from middlemen inflates costs by 150 – 200%.

Gordhan not-so-reassuringly claims that this fraudulent practice will be stopped entirely soon. But it raises the question: why has this corruption in procurement been allowed to continue despite the appointment of a new CEO and reconfigured Board?

It is outrageous that the ANC government is supporting yet another R5 billion bailout for SAA precisely as this procurement corruption is continuing unabated.

Only last week, SAA CEO Vuyani Jarana admitted that the struggling airline had already spent R3 billion of this bailout on paying arrears, meaning that these very middlemen are being paid even though Parliament has not yet considered or approved the bailout.

Gordhan’s board reshuffle and bailout strategy has not rooted out corruption and inefficiencies at SAA. The only solution is to place SAA under business rescue, where corrupt contracts with dodgy middlemen can be terminated immediately.

Issued by Alf Lees, DA Shadow Deputy Minister of Finance, 15 November 2018