Wed. Jul 24th, 2024

The breakdown of negotiations between South African Airways (SAA) and the Takatso Consortium has raised significant concerns, prompting political parties to demand clarity from Public Enterprises Minister Pravin Gordhan.

Parliament’s portfolio committee overseeing State-Owned Entities expressed hope that lessons would be drawn from the failed SAA deal.

Minister in the Presidency, Khumbudzo Ntshavheni, criticized Takatso’s characterization of the Competition Tribunal process as “red-tape,” emphasizing its importance in ensuring fair competition.

However, the reasons behind the collapsed deal are multifaceted. Minister Gordhan cited new valuations that altered the deal’s complexity, with SAA’s value fluctuating from R2.4 billion during the pandemic to R1 billion post-pandemic.

Takatso Consortium cited increased risk and uncertainty due to renegotiations and changes in the deal structure, leading to their withdrawal. They deemed the new terms unacceptable and anticipated lengthy regulatory processes.

Ntshavheni affirmed Cabinet’s decision to terminate the deal, asserting it was not in the nation’s best interest and aimed to protect SAA and its assets.

Chairperson of the portfolio committee on public enterprises, Khaya Magaxa, welcomed the deal’s termination, emphasizing the commitment to transparency and accountability.

Gordhan explained that changing market conditions necessitated new valuations, leading to increased property value but disputed equity values.

The requirement to navigate the Competition Tribunal and potentially repeal the SAA Act further complicated the deal, ultimately contributing to its collapse.

The saga surrounding the failed SAA deal underscores the challenges in restructuring the airline and highlights the need for transparent and robust decision-making processes in state-owned enterprises.

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