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SAA control given to Gordhan

Publish date: 06 August 2018
Issue Number: 785
Diary: IBA Legalbrief Africa
Category: South Africa

SAA has reverted to the Department of Public Enterprises after reporting to the Treasury for almost four years, according to a presidential proclamation gazetted on Wednesday. A Business Day report notes the Cabinet approved the transfer of SAA from the Department of Public Enterprises in 2014, which was then headed by Lynne Brown, to the Treasury under Nhlanhla Nene. Brown was dropped when President Cyril Ramaphosa announced his first Cabinet early in 2018, replacing her with former Finance Minister Pravin Gordhan. The presidential proclamation was signed by Ramaphosa and the two affected Ministers on 25 July. It reads: ‘In terms of section 97 of the Constitution … I hereby transfer the administration, powers and functions entrusted by the South African Airways Act, 2007 and all amendments thereto, from the Minister of Finance to the Minister of Public Enterprises, with effect from 1 August 2018.’ Gordhan said his department was well placed to consider strategic alignment and synergies between SAA and SA Express. ‘I have had a joint meeting with the chairs and deputy chairs of both airlines and we will now start the process of formalising a joint board committee to give effect to this strategic alignment and operational consolidation,’ he said. In a joint statement, Nene and Gordhan said the transfer of SAA to Public Enterprises followed a study commissioned by the Treasury and the department to develop optimal group structures for the carrier’s assets. They said the recommendations from the study, if considered appropriate, could require implementing changes to the group structure of SAA. ‘As the executive authority for other major state-owned companies, including SA Express, the Minister of Public Enterprises is best placed to be the custodian of all of the state’s aviation assets.’ The assets are SAA and its subsidiary, Mango, and SA Express.

Full Business Day report