Tue, 07 Apr 2020

The South African Transport and Allied Workers Union has slammed what it claims is the "hands-off approach" of the Department of Public Enterprises regarding state-owned airline SA Express.

Albeit at President Cyril Ramaphosa's behest, state-owned flag carrier South African Airways (SAA) went into voluntary business rescue in December 2019.

State-owned regional airline SA Express, however, was forced into business rescue in February this year after a successful urgent High Court application by one of its creditors, transport and logistics company Ziegler SA. According to Ziegler, SA Express owes it around R11.3 million for services rendered.

In Budget 2019, SA Express was allocated R1.2 billion, while in September it received another R300 million bailout to enable it to continue operating.

"We are wondering: where is the DPE? Their silence is deafening," Satawu spokesperson Zanele Sabela told Fin24 on Friday, adding that the union's request is not directed at any particular person, but rather the "decision makers" at DPE in general.

"Time is of the essence. The opportunity to engage is now. The DPE needs to say what its position is on SA Express. The DPE must come to the party. They must act," said Sabela.

"It is a known fact that SA Express has been plagued by suppliers who are currently under internal review for serious abuse of the procurement system, unfair pricing and overcharging," the SA Express board stated at the time of being placed in business rescue.

READ | SA Express 'terribly distressed', court hears

According to Satawu, the DPE "did not bother" to appear in court during the business rescue application to support SA Express, despite named as one of the respondents in the application.

The business rescue practitioners (BRPs) Phahlani Mkhombo and Daniel Terblanche, held their first meeting with creditors and other affected persons earlier this week, Satawu told Fin24.

The union says the BRPs informed the gathering that, although they had held several meetings with representatives of the DPE, they were yet to meet with "decision makers" of the department.

"Of critical importance are the funds required to expedite the business rescue. Whereas money was allocated to rescue SAA, no funds have been set aside in SA Express' instance, mainly because it was involuntary," states Satawu.

"The BRPs have already indicated to the DPE that R350 million will be required to save the airline. But to date they have had no response."

Three options

According to Satawu, the BRPs said they had presented three options for the DPE to choose from, the choice of which will then determine the BRPs' next move.

In a statement about a week after being forced into business rescue, the board of SA Express said the airline continued to affirm its importance to South Africa's developmental objectives.

"The business rescue process is well-coordinated, with no disruptions to customers and employees. SA Express' board of directors and executive committee will continue to protect this national asset by pursuing and laying charges against those embroiled in malfeasance, irregularities and contraventions of the Public Finance Management Act (PFMA)," the statement said.

Fin24 requested a response from SA Express, the DPE as well as the BRPs to Satawu's latest statements, but by deadline none had been received. Should comment be forthcoming, this story will be updated.

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