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Opposition calls for action on SAA as Parliament mulls another extension

───   05:53 Tue, 26 Jul 2016

Opposition calls for action on SAA as Parliament mulls another extension | News Article

Cape Town - The chairman of Parliament’s standing committee on finance, Yunus Carrim yesterday said it was up to the Speaker whether to allow the tabling of SAA’s financial statements to be delayed by a year.


This, as the DA called for legal advice on the matter.

Carrim told the African News Agency (ANA) all he had to say about the matter was that it was with the Speaker’s office and that it was standard procedure as the legislature tabled Finance Minister Pravin Gordhan’s letter asking for the deadline to be moved back to September 15.

The Speaker’s office indicated however that as the request had been published in Parliament’s Announcements, Tablings and Committee Reports list, the matter had effectively been referred to the committee for consideration.

It is Gordhan’s third request for an extension and is, like the earlier requests, based on the fact that National Treasury had yet to complete its consideration of the national carrier’s need for more financial help.

"Please note that the process of reviewing SAA’s application for a going concern guarantee is not yet finalised. Therefore, I humbly request that the Standing Committee on Finance (SCOF) extend the deadline for the tabling of SAA’s Annual Report to the 15th September 2016," he wrote in the letter tabled July 7.

South African Airways (SAA) owes R15 billion, all of it underwritten by government guarantees.

Democratic Alliance (DA) deputy finance spokesman Alf Lees said he doubted an extension was in line with the Public Finance Management Act, or made any sense.

"If SAA was not a going concern at the end of the financial year, it cannot be made so retroactively by financial support from the State," he argued.

Lees said Parliament must insist the financial statements be tabled without further delay. He pointed out that the statements were due to be tabled in September last year, and were therefore already 10 months overdue.

"That is 10 months … that Parliament has not been able to exercise its oversight role, 10 months of no accountability at SAA and 10 months of open defiance of directives issued by the National Treasury."

Lees said the official opposition believed that the extension should be denied and that further government guarantees would only heighten the risk that SAA’s woes posed to the South African fiscus.

The DA blamed the delay on a widely-perceived stalemate between the finance minister and the presidency over the SAA board.

When Gordhan tabled the national budget in February, he told reporters that he planned to appoint a new board soon to implement a turnaround strategy. Five months later, this is yet to happen and observers and the opposition see it as part of the ongoing power struggle between President Jacob Zuma and the finance minister he re-appointed in December under pressure from business leaders.

"The minister of finance has not been able to implement the turnaround plan that he announced in February 2016. This stalemate between Minister Gordhan and SAA Board Chairperson, Dudu Myeni, is rapidly driving SAA to total collapse and simply can’t be allowed to happen to the national carrier."

Myeni, who is close to the president, lost a tug of war with National Treasury over her plans to renegotiate a contract with Airbus last year.

Last week, SAA was forced into another climbdown when it cancelled the contract with BnP Capital‚ the "boutique" financier it had appointed to help restructure its debt and to raise funds in return for a R256 million success fee.

ANA

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