South Africa’s official opposition party, the Democratic Alliance (DA), has expressed reservations over finance minister Pravin Gordhan’s decision to grant a going concern guarantee of R5 billion to South African Airways (SAA), particularly with Dudu Myeni’s reappointment as chair to the struggling national carrier.
“The decision to grant the guarantee,” DA MP Alf Lees said in a statement on Saturday, “would bring the total guarantee liability to the state to R20bn. It is a significant risk because the guarantee cannot be revoked should the board be unable or unwilling to fulfil the conditions.”
Furthermore, the party plans to file an application to the Western Cape High Court to have Dudu Myeni's reappointment as chairperson set aside.
Although the DA welcomed Gordhan’s conditions, it still held the view that the reappointment of Dudu Myeni as SAA chairperson was irrational, Lees said.
“That is why the DA is preparing its case for the reviewing of this appointment. There can be no illusion that the sensible thing to have done in order to give the new SAA board a fighting chance of saving SAA from total collapse would have been to remove Dudu Myeni from the board."
Despite SAA not publishing annual financial statements, the DA claimed the airline had run at an apparent R1.3bn loss for the first quarter of 2016/17, a R4bn loss for 2015/16 and R4.7bn for 2014/15.
“The DA remains resolute that the additional state guarantee should not have been granted as long as Dudu Myeni remained a member of the board at SAA,” Lees said.
