Will Ramaphosa be the hero and save parastatals?
The Deputy President has been given the mammoth task of saving Eskom, SAA and the Post Office.
CAPE TOWN - Deputy president Cyril Ramaphosa has been given the job of saving three cash strapped parastatals, Eskom, South African Airways (SAA) and the Post Office.
During a post cabinet briefing in Pretoria on Thursday it was announced that SAA would be transferred from the Department of Public Enterprises to the National Treasury.
Minister in the Presidency Jeff Radebe says it's not the first time a state owned company has been moved to a different department.
"The former president Thabo Mbeki transferred the Land Bank to National Treasury, which is the case right now. The financial challenges that SAA is facing for being transferred to National Treasury it will be closer to the action than it will be when under Public Enterprise."
It was also confirmed that Eskom had sufficient funds to continue purchasing diesel until the end of January.
But the minister said they are also putting other plans in place, such as accelerating the programme for the substitution of diesel with gas to fire up the diesel power plants.
A technical team will also ensure other interventions are implemented, such as co-generation opportunities.
DIRE FINANCIAL SITUATION
SAA on Wednesday said it was aggressively re-examining its routes that are costing it R1 billion per annum in order to improve the airline's dire financial situation.
Chief Executive Officer (CEO) Nico Bezuidenhout briefed 567 Cape Talk's Kieno Kammies on the airline's 90-day turnaround plan.
"Our process at the moment, given that the role is reconstituted, is to step through all these controls and government steps and saying 'let's see where all the failures exist and correct them'."
In recent years, SAA faced money issues and has been relying on the state to stay afloat.
This has caused the airline to delay releasing financial statements as well as put its annual general meeting on hold.
Although SAA has relied on state funding, Finance Minister Nhlanhla Nene also turned down government grants for the airline.
The airline has given itself a deadline to have implemented a successful turnaround strategy by March next year.
"It's our responsibility to implement this plan, there is no new strategy, this is the old strategy. Implement what you say you are going to implement," said Bezuidenhout.
He said looking into routes that go into India and Asia, it was discovered that the airliner was losing R1 billion per annum.
"We need to very aggressively look at those routes and make changes."
Poor corporate governance is also an area that needs to be re-examined. Two months ago, six SAA board members resigned.
Cabinet later approved the appointment of additional board members.
Bezuidenhout is adamant the new board stands as a united front with the challenge of improving SAA's financial state.