The Takatso deal has been mired in controversy since it was announced in July last year.
PARLIAMENT is likely to only receive a warbled response on its demand from the Department of Public Enterprises (DPE) on the SAA equity partnership deal with Global Airways that saw the Takatso Consortium taking a major stake in the national airways.
The deal has been mired in controversy since it was announced in July last year.
Parliament’s Standing Committee on Public Accounts (Scopa) last week instructed the Department of Public Enterprises (DPE) to provide details on the processes or lack thereof, leading to the uplifting of the Takatso Consortium as the preferred majority partner for SAA.
Industry insiders said over the weekend that the deal was unlikely to be consummated as expected, because Global Airways, the majority partner in Takatso, had been doing “free shopping”, expecting the state to provide subventions in the next fortnight, as analysts insist that bird will never take off.
Insiders at the Department of Public Enterprises (DPE) said on Monday that the Takatso transaction “was always going to be a difficult deal”. Takatso’s “free shopping” on the SAA deal meant it was hoping for government to rain funds on the struggling airline, which has in recent times racked up over R10.5 billion from state coffers.
“It is hard to see this deal going forward, one of Global Airway’s subsidiaries (Maintenance and Repair Operations MRO) responsible for maintenance and overhaul of aircraft went into business rescue. How could they have the money to take a majority stake in a national airline,” an industry insider said, adding that SAA was of way more value than the R3bn that Takatso was supposed to come up with.
Scopa last week sought clarity from the Minister of Public Enterprises, giving the DPE 14 days to provide Scopa with more information about the strategic equity partnership deal between SAA and the Takatso consortium.
National Treasury director general Dondo Mogajane told Parliament that Treasury was consulted only after the DPE had concluded a Memorandum of Understanding (MoU) and agreed on the principles of the transaction with Takatso as strategic equity partner for SAA.
“There has been a lot of consultations between teams, but there has been limited government-driven programmes in this. We are preparing the responses for Scopa, but the point is that the deal caught a lot of us by surprise, this was always going to be a difficult transaction,” a senior DPE official said.
The National Union of Metal Workers of South Africa (Numsa) weighed in on the matter. Spokesperson Phakamile Hlubi-Majola said concerns raised by labour and civic society had been ignored by the DPE as it lined up the transaction.
“We still do not have the financial statements of SAA – even from back in 2017/18 financial years. Scopa is no doing enough to hold the DPE accountable,” she said.
A senior aviation analyst said Global were mostly an operational group interested in having a piece of SAA, which they would expect the government to continue funding as they did behind the scenes work and were in the deal as “free shoppers” counting on the government to continue carrying the financial burden.
“They are hoping to go to the PIC or some other funding institution to get money for free, they thought they would get the business for free. My belief is this deal will never take off under current arrangements. The 51 percent stake for Global and 49 percent for the state would have never worked anyway, I believe the whole exercise has been a waste of time. The expertise will only come once government has pumped in more money” he said.
He said the focus on accountability now was as a result of impending elections in the country. The government would be pressed to answer for transactions like this, hence the new found urgency, almost a year after the strategic partnership was announced.
“The president (Cyril Ramaphosa) will have to make some tough decisions, unions will be asking how national assets have been handed over to private hands. The national treasury is washing its hands of it and they are saying they are not aware of the deal. How can they not know? Who is the DPE to make such decisions on its own,” he wondered?
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