Public Enterprises Minister Pravin Gordhan. Photographer: Leon Lestrade / Independent Newspapers
In a shock announcement, Minister of Public Enterprises Pravin Gordhan said that the sale of South African Airways (SAA) to Takatso consortium has been called off.
Gordhan said he presented this to Cabinet on Wednesday.
He said this was due to new valuations that have emerged and put SAA at R1 billion and its properties at R5.5bn.
This comes after Business Report reported earlier this week that the deal was ‘dead in the water.’
An aviation official said the question of who was “going to bell the cat” in informing the public that the deal was through had become a “pass the parcel” matter.
“The minister could not say the deal had failed because he had always been the one pushing it. He did not want to reveal the Takatso documents of Parliament because the truth would have come out.
“He waited until he could announce his retirement,” the source said.
In response, the opposition party, the Democratic Alliance (DA) said that it was inevitable, ‘given that it was a bad deal from the beginning.’
The DA said in a statement, “Gordhan’s stubborn insistence on keeping details of the deal secret and the Takatso Consortium’s insistence for more taxpayer funds before the deal could be consummated, were clear red flags. Gordhan, together with President Cyril Ramaphosa’s Cabinet – who collectively approved the deal, must now be held accountable for failing to exercise due diligence before entering into sale negotiations with Takatso. They all failed in their fiduciary duties as custodians of a state asset and should bear responsibility for any losses that taxpayers may have incurred during the period when the deal was supposedly in force.”
The party went on to state that the taxpayer took on all SAA’s massive liabilities of some R15 billion leaving SAA debt free with considerable assets including a respected brand all of which had a likely value that exceeded R7 billion.
“For 51% of this debt-free SAA to be sold for R51 was outrageous and a slap in the face of taxpayers. The DA will be demanding that Gordhan tables the contract termination documents that he entered into with Takatso to terminate the deal. After spending years refusing to release the purchase agreement, South Africans at least deserve to know the reasons behind the termination of the dud SAA/Takatso deal,” the DA said.
“Today’s announcement is an epitaph of what has been a disastrous tenure for Gordhan as the Minister of Public Enterprises. His announcement that he will be resigning at the end of the current administration is a little too late as he has left a trail of destruction in his wake. SAA will once again become a burden on the South African taxpayer because he failed to exercise due diligence in finding a viable partner for the airline. SAA is now a clear example of how the ANC government has mishandled SOEs and drove most of them to the brink of bankruptcy. There is no strategic need for a state-run airline that diverts limited State funding away from the desperate need to stimulate economic growth. SAA must be cut loose and be sold,” the DA further said.
Gordhan last week threw in the towel in a battle to bar members of Parliament’s portfolio committee on public enterprises, which had for months sought clarity on the documents submitted by the Takatso Consortium in its interests on SAA.
BUSINESS REPORT