EFF accuses Gordhan of ‘deliberately collapsing’ SAA after govt cuts funding

Image credit: Twitter/Economic Freedom Fighters

The Economic Freedom Fighters (EFF) has accused Public Enterprises Minister Pravin Gordhan of “deliberately collapsing” South African Airways (SAA).

The party was reacting Gordhan’s letter dated 10 April informing SAA that the government will not support an extension of its foreign currency borrowing.

SAA was placed under business rescue in December last year. Its business rescue practitioners (BRPs), Les Matuson and Siviwe Dongwana, had requested a further R10 billion in government funding or guarantees.

Gordhan ‘arrogantly dismissing BRP advice’

In his letter, Gordhan said, “Further note [that] government is unable to provide additional funding to sustain the business rescue process beyond the funding that has already been provided to the airline in the form of post-commencement finance (PCF).

“Further to this, please note that neither will lending guarantees be provided in respect of the business rescue process.”

The Minister said the COVID-19 pandemic had stretched the government’s resources and urged the BRPs to “consider their options within their available resources.”

However, in a statement on Wednesday, the EFF said Gordhan was deliberately collapsing the airline “by creating an environment of fiscal uncertainty and arrogantly dismissing advisory measures provided by [the] appointed BRPs.”

‘Gordhan’s determination to collapse SAA’

The party said the Budget presented by Finance Minister Tito Mboweni in February failed to allocate funds to support the BRPs’ measures, which it claimed the government had “agreed upon to save the entity and secure jobs.”

It added, “Although the global COVID-19 pandemic has stretched the finances of the government thin, these are funds that should have long been allocated but have not due to Gordhan’s determination to collapse SAA and subject its employees to poverty.

“It is therefore clear that Gordhan has no intention of rescuing SAA or protecting the incomes of its employees. He has no appreciation for the need for a domestic airline owned by the state.

“This is dangerous if one considers that if it was not for SAA, we would not as a nation be able to repatriate citizens stranded in foreign countries in the midst of the COVID-19 pandemic.”

In a statement on Tuesday evening, Gordhan said his department is in continuous engagement with the BRPs.

“Working with the business rescue practitioners, government must urgently determine the operating and business model for a rescued airline, with a sustainable financial model,” he said.

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