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All SAA flights to stop operating from 8 May - Gordhan

Public Enterprises Minister Pravin Gordhan is briefing a joint virtual meeting of Parliament’s committees charged with oversight of Public Enterprises on developments in state-owned enterprises, including SAA.

FILE: Public Enterprises Minister Pravin Gordhan. Picture: Abigail Javier/EWN

CAPE TOWN - Public Enterprises Minister Pravin Gordhan said South African Airways (SAA)'s business rescue practitioners had said that all flights, including repatriation flights, would be stopped on 8 May.

The minister said that this is may change if government was able to find money.

Gordhan was briefing a joint virtual meeting of Parliament’s committees charged with the oversight of Public Enterprises on developments in state-owned enterprises, including SAA.

According to Gordhan, R5.5 billion had been spent on the airline in the last five months.

"The department had a discussion with the BRPs and there is now some indication that of some flexibility in this regard, if we can find savings from within the R5.5 billion."

GOODBYE OLD SAA

Gordhan said that the old SAA would not exist in the future.

“Partly for the reasons that it was not competitive and it wasn’t viable as it was at that particular point in time but also because of the whole environment within aviation, and in the economy, has changed very significantly and no one can anticipate what air travel is going to be like even two months down the line."

Gordhan said that government believed that there was an alternative transition process and a business proposal would be put forward to the business rescue practitioners in the next 48 hours depending on when a meeting is scheduled with them.

Gordhan said they had also consulted with the eight trade unions recognised by SAA on what the future of the new (or existing) airline would look like.

Not every employee will be employed at the new airline Gordhan said.

"And if there are other airlines, in South Africa that have the same difficulties, they will have similar issues to contend with as well. So what we need to do in a responsible way is to put together a social plan which will have various dimensions that will, in essence, look after the welfare of labour but also change the way in which business is done."

DROP IN DEMAND PATTERNS, CHANGES IN CONSUMPTION AT ESKOM

Eskom CEO Andre de Ruyter said that since the announcement of the coronavirus, the power utility had seen a vast change in consumption and demand patterns.

“The first major impact that COVID-19 has had was that we saw a very drastic drop in demand. On average, about 7,500 megawatts and that has peaked to 9,000 megawatts. The pattern of consumption has also changed, in that we have seen that the morning peak has, by and large, disappeared and the evening peak has become far more pronounced and the night dip has also become far more pronounced."

De Ruyter said that this had created difficulty in ensuring Eskom’s systems remain stable.

"We have taken up to 11 units out of service and put them in coal reserve and these are brought back as the system demands it and we are getting quite good at taking these units out and taking them to service."

De Ruyter said that this made him confident that Eskom would be able to service the high levels of demand after the lockdown period.

The Eskom chief said that there was a high degree of confidence that after lockdown, the initial 31 days of planned stage 1 load shedding for the next quarter would be reduced to 3 days.

REDUCTION IN MINING AND INDUSTRIAL SECTOR

De Ruyter said that Eskom had a seen a reduction in consumption in the mining and industrial sector.

“We anticipate that after accounting for lost revenue due to lower sales as well as because we have been saving on primary energy, particularly on coal, that we have seen a reduction in cash generation in April of some R2.5 billion.”

De Ruyter said they have been unable to conduct the liability maintenance philosophy because that would require longer shutdown periods.

Eskom will resume operations on 1 June 2020.

ROOM TO FAST TRACK MAINTENANCE AT TRANSNET

Transnet’s newly appointed CEO Portia Derby said that the reduction of volume for the rest of the year may have an impact on revenue but would give the SOE a little bit of room to fast track its maintenance.

“But that’s on condition though that the rest of the maintenance industry and supplies we need for some of our parts for equipment is able to reach us in South Africa as well.”

Derby said that the heavy-haul rail system from Saldanha had been functioning well.

"We are now at a situation where our chrome-magnetite and manganese are back up and our revenues are starting to look quite well."

According to Derby, despite Transnet only having a 50% working capacity, the SOE had been able to make about 60% of its forecast revenue for quarter one.

WATCH: Gordhan briefs MPs on SAA, other SOEs