After the Bell: Gordhan’s blunders on the runway to the failed SAA privatisation deal

  • 📰 dailymaverick
  • ⏱ Reading Time:
  • 44 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 21%
  • Publisher: 84%

Business Business Headlines News

Business Business Latest News,Business Business Headlines

So what is the outcome of this extremely unfortunate turn of events? Well, for the government, it’s really bad. The whole theory of the government-business partnership rests on a foundation of understanding and trust. Changing the price of a deal after you have signed a contract, in whatever circumstances, is — how should we put this? — not good.

All of the government’s future attempts at dumping its hot potatoes in private sector laps will rely on the government keeping its word, being able to execute sensibly and quickly, and politicians trusting and understanding what the department is doing and why. Not one of these things happened in this case.

Let’s go through those decisions. Right at the start of the process, the government decided that the political cost of pumping billions into SAA was not sustainable, so the idea was to pass that responsibility on to the private sector. Sorry. I mean, enter into a public-private partnership. The reason we don’t know this is that Gordhan was at this point bending a whole bunch of rules to make the deal happen. The reason he was bending the rules was desperation. The process was taking so long that SAA was nose-diving, helped by the dire situation for airlines around the world caused by the Covid-19 pandemic.

Much to the credit of SAA’s new management, the airline’s financial position, while precarious, might be sustainable. In December, John Lamola said that SAA was “in a healthier financial position than it has been in several years”.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 3. in BUSİNESS

Business Business Latest News, Business Business Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Streamlined SAA 2.0 no longer a shadow of its former self‘I can assure you that South African Airways since its reemergence from business rescue … has been on a remedial programme to sort out all those audit findings that the 2018 financials are about’ – Professor John Lamola, SAA interim CEO.
Source: Moneyweb - 🏆 5. / 77 Read more »

SAA sale controversy: Parliamentary meeting may reveal detailsThe 51% stake in South African Airways (SAA) was awarded to Takatso only six weeks after the airline emerged from business rescue.
Source: TheCitizen_News - 🏆 6. / 75 Read more »