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Gordhan to meet with SAA’s BRPs within 48 hours amid increasing tensions

Briefing Parliament’s committees on public enterprises on Wednesday night, the minister made it clear that the government was at odds with the BRPs’ approach.

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

CAPE TOWN - In the next 48 hours, Public Enterprises Minister Pravin Gordhan is set to meet with South African Airways’ (SAA) business rescue practitioners (BRPs) in a bid to iron out the tensions between them and the government.

Briefing Parliament’s committees on public enterprises on Wednesday night, Gordhan made it clear that the government was at odds with the BRPs’ approach.

The airline was put into business rescue earlier this year, and the business rescue practitioners have recommended that it either be liquidated or wound down, with all staff retrenched.

But the government was intent on seeing a new airline rising from the ashes and was determined to save as many jobs as possible.

Gordhan could provide few details on the shape and form of a new airline and how it would be funded, including strategic equity partners.

But he made it clear the government was at loggerheads with SAA’s BRPs, who want all flights – including those to repatriate stranded South Africans – halted by Friday.

Issues included the way the business rescue team had spent the R5.5 billion it was given to manage the process, with Gordhan saying between R30 million and R35 million was spent on American consultants, with the government yet to see the value for its money.

“In the next 48 hours or so we will be meeting with them to examine finances to see how much money can be found to give as much continuity as possible beyond 8 May,” the minister said.

“We also want to indicate that there should be no fire sale of important assets of SAA, nor should there be any movement towards liquidation when, in fact, there are many alternatives that can be pursued,” he added.

Gordhan said the BRPs and consultants were asked to cut their fees by up to 40%, saying that unions had already come to the party by agreeing to wage cuts. He said the government had so far received only a sketchy business plan from the practitioners.

“By that we mean we need to understand what should the shape of a new airline be and we’ve invested as a department a fair amount of energy and time and [in] the retention of experts to give us a design of a potential future airline, which will be completed shortly,” Gordhan said.

FUTURE AIRLINE TO REPLACE SAA

Meanwhile, Gordhan said whatever shape a new national carrier takes, it would not be like the old SAA.

He also told Parliament that if the BRPs continued with winding down the stricken national carrier, this would not be in line with the government’s original aims for the business rescue process.

“The old SAA as it exists will not exist into the future – partly for the reasons that it was not competitive and unviable as it was in that particular point in time, but also because of the whole environment, both within aviation and the economy more generally, has changed very significantly – and nobody can quite anticipate what air travel is going to be like, even two months down the line,” he said.