Feb 7, 2023

Mawazo Writing Africa

Writing about the main

‘It was the better option’ — Pravin Gordhan defends decision to privatise struggling SAA

Public Enterprises Secretary Pravin Gordhan has defended the decision to privatize the embattled SAA, saying several factors contributed to the decision, including that it was dormant during the Covid-19 pandemic.

In February, the government announced it had completed the sale of a 51% stake to the private consortium Takatso without disclosing the price.

On Cape Talk, Gordhan defended the decision, the stricken one national airline and said the decision was a better option.

“You have an asset that you could have divested and there would have been a sale of some buildings and so on. All of the odd 4,000 employees would have lost their jobs and walked away with about R28,000. The alternative was much better for the staff and the airline that we can get it working,” Gordhan said.

He previously described SAA as a tax drain that has paid the government more than R49 billion since 2006 bailouts and has failed to turn a profit since 2011.

“Despite its rich history, the SAA has faced financial difficulties over the past decade due to gross mismanagement, corruption, government capture and misuse of SAA resources

“This resulted in continued financial losses, internal controls were decimated, there was a collapse in consumer confidence and ultimately a loss of market share,” he said.

Speaking to the media on Monday Julius Malema, chairman of the EFF, threatened to take legal action against the government over the sale.

He said the sale of SAA was part of a plan by the government to ban all state-owned companies to privatize.

“We condemn and oppose the sale of SAA because it is irresponsible and corrupt. It is absolutely unreasonable to sell an airline to people connected to and controlled by the white capitalist establishment.

“We will do everything in our power to reverse the sale, because it’s obvious that all state-owned companies are first made to malfunction and then given away for free to the white capitalist establishment,” Malema said.

He claimed the sale was a Citing rising unemployment and poverty, South Africans were being tricked and undermined while their living conditions did not improve.

“Amid job losses and rising poverty, the prices of all necessities, including the fuel prices. Rising fuel and food prices are making our people’s living conditions worse, and the government has no willingness or capacity to fight rising prices,” he said.

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