Irvin Jim, the general secretary of Numsa, wrote in his Business Report column last week that the union was overjoyed to hear that ‘the worst minister since the advent of democracy’, would be retiring from politics. Picture: Bongani Mbatha/ Independent Newspapers.
The long-running planned take-over of the ailing state-owned airline South African Airways (SAA) by the Takatso Consortium abruptly came to an end earlier this week.
This comes three years after the Takatso deal was announced, in which it was slated to take over a majority stake, 51%, in the airline. However, subsequently Public Enterprises Minister Pravin Gordhan kept details of the deal with the government confidential, which led to a public outcry around fears of corruption.
Gordhan told the cabinet on Wednesday that due to new valuations emerging, it put SAA at R1 billion and its properties at R5.5bn.
Gordhan said the deal was off because they decided to cut their losses with Takatso after new valuations from reputable professional firms.
The deal was agreed upon during the 2020 Covid-19 pandemic, which centred as a major selling point to Takatso, who expected a major rebound in the airline industry post pandemic.
During Covid when the valuation was done, the value of SAA was R2.4bn. After Covid-19 this increased because of changed market values.
“The business valuation came out at R1 billion and the property valuation at R5.5 billion. This meant that there was a net increase in the property by R3.1 billion in the value of SAA. The equity value had increased from 0 to R1 billion.
“Those negotiations continued for the latter part of last year and this year. However, we came to a point where there were other issues, where there (were) no meetings of minds. For example, the exemption of the new entity in terms of paying rental for the property they will utilise in that process,” said Gordhan.
The collapse of the deal means that SAA is now once again, a fully owned state-owned-enterprise (SOE), however, the minister gave assurances that taxpayers would not sustain the airline going forward.
He said other funding options would be looked at for the expansion of its operations, including expanding its route network.
“SAA can sustain itself for the next year to 18 months and there are various other ways to get immediate financing, but at no stage in the course of the months to come, will SAA get money from the fiscus,” Gordhan said.
He further added that jobs of SAA staff were safe.
The outgoing minister said that he would be leaving the world of politics post the 2024 elections, something, which the National Union of Metalworkers of South Africa (Numsa) cheered.
Irvin Jim, the general secretary of Numsa, released a statement on March 9 after it was announced that Gordhan was stepping down, ‘Numsa: Gordhan’s retirement as the minister of Public Enterprises is ‘good riddance to bad rubbish!’ . He said the union was overjoyed to hear that “the worst minister since the advent of democracy”, would be retiring from politics.
Jim went on to say that Gordhan went on to wreck every single state-owned entity (SOE) that he touched.
“We said in our previous statement that he has a “deadly Midas touch” because everywhere he goes, SOEs collapse and workers suffer. He claimed he was turning around SOEs unfortunately, most of them are in ICU or have died because of his involvement. It is a painful irony that Gordhan once served as a member of the South African Communist Party Central Committee because his actions have been a relentless and brutal attack on workers and their families. His values are the opposite of Communism and its noble ideals, which are to advance and to improve the lives of the working class,“ Jim wrote.
Meanwhile, an aviation official told Business Report that 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.
BUSINESS REPORT