EDITORIAL: Telkom option has own pitfalls
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It looks like there’s no stopping public enterprises minister Pravin Gordhan’s determination to restart SAA.
We have written before criticising a plan that would suck up money from a Treasury that has put fiscal consolidation at the heart of its budgeting as SA grapples with a ballooning budget shortfall and rising national debt in the wake of the Covid-19 pandemic.
With creditors having endorsed the plan, and the Treasury seemingly on board — though there is still no clarity on the sourcing of R10.1bn needed to cover the immediate costs of getting the airline running again — SAA could well be back from a certain death, however ill-advised.
It’s worth analysing the latest statement from the minister, saying the government has stepped back from its position that a new airline that emerges should be majority state-owned. It is now looking at Telkom as a possible model for the airline.
The government owns 40% of Telkom, while the Public Investment Corporation, which is state-owned but has an independent board that invests public servants’ pensions, is the second-largest shareholder with more than 14%.
If the plan goes ahead, it would be one of the biggest ideological shifts in the ANC, which as recently as January reaffirmed that the government must own a controlling stake in the restructured or new SAA.
For the taxpaying public, who have coughed up billions of rand to keep an airline that has not delivered profits since 2011, it should be easier to accept an airline in which private investors have control of its strategic direction and can punish management for corporate blunders that have dogged SAA.
For finance minister Tito Mboweni, the lone voice in President Cyril Rampahosa’s executive team rightly not buying the idea of reviving SAA, it could mean one less state-owned company holding out a begging bowl for cash injections.
Since its listing and semi-privatisation two decades ago, Telkom has been by and large a profitable company, thanks in part to a strong management team and the prospect of getting its share price whacked by unforgiving investors. That is despite the company being forced to juggle demands from the government, unions and private investors.
Under CEO Sipho Maseko, Telkom has drawn up a coherent plan to reinvent itself from an entity built on fixed-line phone technology into a major modern telecommunications player. The company’s mobile-phone business, written off as doomed to fail when it ...
We have written before criticising a plan that would suck up money from a Treasury that has put fiscal consolidation at the heart of its budgeting as SA grapples with a ballooning budget shortfall and rising national debt in the wake of the Covid-19 pandemic.
With creditors having endorsed the plan, and the Treasury seemingly on board — though there is still no clarity on the sourcing of R10.1bn needed to cover the immediate costs of getting the airline running again — SAA could well be back from a certain death, however ill-advised.
It’s worth analysing the latest statement from the minister, saying the government has stepped back from its position that a new airline that emerges should be majority state-owned. It is now looking at Telkom as a possible model for the airline.
The government owns 40% of Telkom, while the Public Investment Corporation, which is state-owned but has an independent board that invests public servants’ pensions, is the second-largest shareholder with more than 14%.
If the plan goes ahead, it would be one of the biggest ideological shifts in the ANC, which as recently as January reaffirmed that the government must own a controlling stake in the restructured or new SAA.
For the taxpaying public, who have coughed up billions of rand to keep an airline that has not delivered profits since 2011, it should be easier to accept an airline in which private investors have control of its strategic direction and can punish management for corporate blunders that have dogged SAA.
For finance minister Tito Mboweni, the lone voice in President Cyril Rampahosa’s executive team rightly not buying the idea of reviving SAA, it could mean one less state-owned company holding out a begging bowl for cash injections.
Since its listing and semi-privatisation two decades ago, Telkom has been by and large a profitable company, thanks in part to a strong management team and the prospect of getting its share price whacked by unforgiving investors. That is despite the company being forced to juggle demands from the government, unions and private investors.
Under CEO Sipho Maseko, Telkom has drawn up a coherent plan to reinvent itself from an entity built on fixed-line phone technology into a major modern telecommunications player. The company’s mobile-phone business, written off as doomed to fail when it ...
