National Treasury hiding the true cost of SAAs renewed loans

The National Treasury appears to be attempting to hide the true cost of South African Airways’ (SAA) latest bailout with its response to the DA’s request for details of interest rates charged on renewed loans to SAA. A request which was supported by the Standing Committee on Finance.

Standard Bank, ABSA, Nedbank and other domestic lenders to SAA were due to be paid R5.0 billion on the 30th of September 2019. These lenders were convinced to roll over their loans provided that certain conditions were met by SAA. One of which was that Ms Dudu Myeni be removed from the SAA board, a condition which was reluctantly complied with on the 3rd of November 2017.

It is suspected that a further condition made by the domestic lenders was that the interest rates charged on the renewed loans would be increased. Consequently the DA requested that the Minister of Finance and National Treasury provide the Standing Committee on Finance with details of the interest rates charged by the domestic lenders.

National Treasury initially responded, on the 1st of November 2017, by saying that the interest rates were confidential. This response was clearly nonsensical as the Standing Committee on Finance had previously been provided with a full list of all lenders to SAA together with the amounts, maturity dates and interest rates.

The Standing Committee on Finance supported the DA’s request for details of the interest rates for SAA’s renewed loans and instructed the National Treasury to provide the details.

Today, Monday the 6th of November 2017, we received the following reply from National Treasury:

‘The interest rates charged by lenders on loans to SAA that were rolled over at the end of September 2017 have changed. The exact figures need to be requested from SAA.’

This is an unacceptable response from National Treasury, that attempts to frustrate its accountability to parliament. SAA falls under the oversight of National Treasury and we believe is obligated to provide the information required by the Standing Committee on Finance.

Statement issued by Alf Lees MP, DA Shadow Deputy Minister of Finance, 6 November 2017