The great parastatal scandal

Politicians are not very good at running state-owned enterprises (SOEs). But they do have a different, and highly developed, skill-set: blaming other people for the things they have screwed up.

On the face of it, the catastrophe at SAA would appear to be the fault of the ANC. After all, it was the ANC’s own fundraising committee that fired the starting pistol that set the SOE parasites crawling, when it decided the ANC-aligned Chancellor House investment vehicle should begin looting Eskom during the presidency of Thabo Mbeki.

Under Jacob Zuma, in a “state-led development” strategy that was applauded by the ANC’s alliance partners, union federation Cosatu and the SACP, a whole swathe of parastatals were opened up to the swindlers.

SAA’s corrupt procurement spend, and its evergreen contracts for politically connected suppliers, are not the fault of people working in the airline industry, or caused by sector-specific challenges. They are part of a wider and conscious political strategy that generated wealth and highly remunerated employment for countless party activists, their relatives, and their political networks.

In turn, the parastatal supply chain barons have generously bankrolled the liberation movement. This strategy could not have been sustained without the extension of hundreds of billions of rand in Treasury loan guarantees to SOEs, in full knowledge that these were very likely to be called in by creditors.

Almost all of the actors in play today at SAA were a part of this great parastatal stitch-up: the ministers, the unions that supported the “developmental parastatal” fantasy, the deployee-rich boards, and those who are still feeding off company supply chains.

Today the airline has no financial runway only because the fiscus is dry. Business rescue was evidently forced on the board and the shareholder, not because it was recognised as right but because it became inevitable.

At best, the outcome will be a much-needed restructuring of the airline and its associated group of companies. At worst — and it is much worse — we will see a less orderly liquidation of the airline in fairly short order.

The professional politicians have responded in the way they know best: by blaming everybody else. The department of public enterprises agreed a 6% pay rise before blaming the unions for damaging the “credibility” of the airline’s turnaround strategy.

The National Union of Metalworkers of SA (Numsa) blamed the SAA board and corrupt managers for a failure to turn the company around. The board criticised the banks for not lending billions more without Treasury guarantees. The finance minister was blamed for refusing to extend such guarantees.

President Cyril Ramaphosa managed not to have an opinion one way or the other. Public enterprises minister Pravin Gordhan implied that all patriotic citizens would buy uninsured tickets from the bankrupt airline. DA shadow finance minister Geordin Hill-Lewis countered that “the most patriotic thing South Africans can do is to help shut down SAA”. We can shortly expect the DA to be blamed for SAA’s demise.

The next culpable agent will be the business rescue practitioner, who is legally answerable solely to the court, but ANC politicians will doubtless publicly second-guess its decisions. Ultimately it too will be a guilty party.

The trouble with all this blame-shifting is that the ANC does not seem to have learned any lessons from its SAA experience. There has been no admission of responsibility or error from the ANC about the great parastatal scandal.

The airline is a little flea in the corner of our parastatal disaster casualty ward. Eskom, the great elephant in the room, is still munching through what is left of the fiscus.

• Butler teaches public policy at the University of Cape Town.

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