INDEPENDENT MEDIAMinister in the Presidency Jeff Radebe addressed the media on the outcomes of the cabinet meeting held on Wednesday in Pretoria. File photo: Thobile MathonsiThe cabinet has announced sweeping changes to the state-owned entities by transferring SAA from the Department of Public Enterprises to the National Treasury.
Minister in the Presidency Jeff Radebe also told journalists in Pretoria, via a video-link to Cape Town yesterday, that Deputy President Cyril Ramaphosa would oversee the financial performance of SAA, the SA Post Office and Eskom.
In a post-cabinet briefing, Radebe said the transfer of SAA was an attempt to help it get its house in order.
It is not the first time that a state-owned entity has been transferred from one department to another.
Eight years ago, when Thabo Mbeki was in charge, the financially troubled Land Bank was transferred from the Department of Agriculture and Land Affairs to the National Treasury.
At the time Trevor Manuel was the minister of finance.
Then senior official in the Treasury, Phakamani Hadebe, was seconded from the Treasury to head the Land Bank and turn it around.
Radebe said there was nothing peculiar about the transfer of SAA from Public Enterprises to the Treasury.
Close watch
In fact, this decision would allow the Treasury to keep a close watch on the airline.
The airline has been asking for another bailout from the government, but Public Enterprises Minister Lynne Brown has refused and has said the airline needs an equity partner to turn its situation around.
It has been reported that Gulf giant airline Etihad is coming on board as SAA’s new equity partner.
Two years ago the Treasury gave SAA a bailout of R5 billion, much to the unhappiness of rival airlines.
Radebe said the transfer of SAA to the Treasury would give the latter an opportunity to closely monitor what was going on at the airline.
The minister would not be drawn on whether this was a permanent move or not.
In another development Ramaphosa has been given the task of overseeing the turnaround of SAA, Eskom and the SA Post Office.
“Cabinet is concerned about the performance of some of the state-owned enterprises, in particular SAA, the SA Post Office and Eskom. These state-owned entities play a critical developmental role within the South African economy,” Radebe said.
“The president has assigned the deputy president, Cyril Ramaphosa, to oversee the turnaround of the three state-owned companies, namely SAA, Eskom and SA Post Office,” he said.
“Working with the relevant ministries, SAA will be transferred from the Department of Public Enterprises to the National Treasury,” he said.
“The Presidency will closely monitor the implementation of the turnaround plans of these three critical state-owned companies that are drivers of the economy,” Radebe added.
Cash crisis
Brown would not be drawn deeply into questions about SAA running out of cash in January.
“SAA issues are financial issues. That is what has to take place within the Treasury,” Brown said.
Radebe also announced that Eskom would present a detailed finance plan on Wednesday on dealing with its cash flow crisis beyond 2015. The plan would outline proposed measures to maintain a stable business without power outages.
Radebe said the government would finance the funding model of Eskom.
However, he did not indicate how much the government would throw into Eskom’s finance plan.
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