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The Clash over SAA Deal: Allegations of a Rogue Campaign by Gordhan

Published March 24, 2024
1 months ago

Public Enterprises Minister Pravin Gordhan has fiercely critiqued Khaya Magaxa, the chair of the portfolio committee on public enterprises. He asserts that what should have been a straightforward parliamentary review, free from bias, has been tainted by Magaxa's alleged agenda-driven actions.

As per a recent Sunday Times article, the controversy stems from the aborted sale of South African Airways (SAA) which drew intense scrutiny from various sectors of government. The deal in question involved selling a 51% stake of SAA to the Takatso consortium for a sum of R51, which has since been abandoned.

The fallout has been rapid, with accusations flying from both sides. Gordhan's spokesperson, Elias Mnyandu, articulated the Minister's viewpoint, suggesting that Magaxa embarked on a solo venture, devoid of concrete evidence, to levy charges of malfeasance against the Department of Public Enterprises (DPE) and Gordhan.

Highlighting Gordhan's criticism, Mnyandu voiced concern over Magaxa stepping outside his remit by overlooking the counsel of parliament’s legal adviser, who found no corruption indicators within the deal. Conversely, Magaxa is accused of conflating unrelated issues and fostering misleading narratives.

The backstory includes the National Treasury's disapproval, citing exclusion from negotiations and a deal allegedly favoring the buyer. Additionally, the economic landscape has shifted since the initial valuation, factoring in a recovering travel sector post-COVID-19 and an improved national economy.

Minister Gordhan reasons that the altered conditions have inflated SAA's value to R1 billion, with property assets crescendoing at R5.5 billion. These revisions necessitate renegotiation of any potential deal terms going forward.

SAA, the nation’s state-owned flag carrier, will thus remain under full government ownership. Gordhan remains optimistic about SAA's self-sufficiency and the pursuit of alternative funding avenues, categorically ruling out additional state finance injections.

A parallel process involving SAA's subsidiary, Mango, is underway as its budget airline is set to change hands from the state to the private domain. Given that Mango is a key budget carrier, its re-entry is likely to inject competition within the market, to the advantage of the South African flying public.

Mango's business rescue practitioner, Sipho Sono, acknowledges the market gap left by Mango's absence but refrains from providing a timeline for its revival. He assures that updates will be shared once the internal mechanism for Mango's comeback is firmly established.

Undoubtedly, the trajectory for SAA and Mango carries implications for South Africa's aviation landscape, with the potential to reshape travel choices and pricing. This contentious situation that marries politics with enterprise continues to evolve.

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