The Minister of Public Enterprises, Mr Pravin Gordhan, and representatives from three of the department’s entities, South African Airways (SAA), Eskom and Transnet appeared before a joint meeting of the Portfolio Committee on Public Enterprises and the Select Committee on Public Enterprises and Communications, to brief the committees on the latest developments at the entities.

Mr Gordhan focussed primarily on SAA, which he said is currently undergoing business rescue, while Eskom and Transnet were represented by their Chief Executive Officers (CEOs), Mr Ander de Ruyter and Ms Portia Derby, respectively.

Mr Gordan told the committees that the business rescue process at SAA will result in the emergence of a new, viable airline. He said: “As we go through business rescue, if the business is rescuable, a new type of airline will emerge and the old SAA will not exist into the future.” 

Asked to provide further details about the planned new airline and where the funding will come from as “launching an airline was a very costly exercise “, the Minister could not give a clear response, but he said: “All is being worked through and some of it is commercially sensible information – the business model and funding.”

Mr Mlindi Nhanha, who is a member of the Select Committee on Public Enterprises and Communication, asked the Minister whether Parliament will be required to amend the SAA Act or if the new airline will operate under the old act. SAA was established in terms of an Act of Parliament in 2007. Minister Gordhan could not give an immediate response, but promised to do so at a later date.

Mr Gordan also added that a process of consultation with labour unions at SAA was underway and discussions involved what a new airline would look like and the reality that “not every employee will be employed in the new airline”.

Asked whether this process was not aimed at privatising SAA, Mr Gordhan said “We are not privatising anything. We will entertain strategic equity partners.” He also warned members of the committees that the cost of air travel will be higher, post-Covid-19, due to new rules such as social distancing, which will impact on the number of passengers in an aircraft. A 100-seater might carry about 30 passengers.

Briefing the committees on the latest developments at Eskom and the impact of Covid-19, Eskom’s CEO Mr Andre de Ruyter said Eskom had experienced a drop in demand, as industries shut down, but “a full financial impact of the Covid and restrictions is still being fully assessed.”

Members of the committees wanted to know if Eskom will be able to keep lights on with more industries reopening as lockdown eased. Mr De Ruyter said: “It will depend on how the lockdown is released, whether a big bang where all industries go back same time or done gradually”.

Transnet CEO Ms Portia Derby said the Covid-19 period was an “extreme change from business as usual”. She added: “As the crisis has unfolded, lessons have been learned and new ways of working have evolved. Relative stability in the environment has given Transnet the opportunity to go through the process of codifying these into a new way of working, based on an estimated 18 months’ impact window for the Covid-19 virus.”

She said the prediction of a deep slump in the global economy will have a negative impact in the transportation (export) of cargo, and the that Transnet Operating divisions (freight rail and the ports, in particular) will be significantly impacted in terms of the volume transported due to the global slow growth.

Sakhile Mokoena
7 May 2020