# Eskom and SAA on road to recovery, says deputy president

- Link: https://dearsouthafrica.co.za/2020/03/05/eskom-and-saa-on-road-to-recovery-says-deputy-president/
- Published: 2020-03-05T09:56:07+02:00
- Author: dearSA

![](https://cdn.dearsouthafrica.co.za/wp-content/uploads/2020/03/20191138/Screenshot-
2020-03-05T095403.065.png "Screenshot - 2020-03-05T095403.065")

### _Despite these debt-ridden SOEs potentially crippling the economy, David Mabuza is confident of turning both around_

Deputy president David Mabuza says the government remains confident that Eskom and
SAA can be returned to profitability despite the current challenges the two state-
owned entities (SOEs) face.

During a Q&A session in the National Council of Provinces on Tuesday, Mabuza reiterated
that the government has no intention of disposing of SAA, despite growing calls 
for the state to sell the debt-laden airline.

The crises at Eskom and SAA have put the government under pressure to show its intent
on the restructuring of SOEs and reducing the financial burden on the fiscus.

In his budget speech last week, finance minister Tito Mboweni allocated R16.4bn 
to SAA specifically for the repayment of debt and interest. Eskom was allocated 
close to R44bn, which will also go towards debt costs. This was in addition to the
R49bn the embattled power utility recently received.

While the government has resorted to putting SAA into business rescue, it faces 
potentially bigger problems at Eskom, the power utility that economists have identified
as the biggest single threat to the economy. This is mainly due to its staggering
debt of nearly R500bn.

The power utility could also cripple the economy through load-shedding and power
outages. Ratings agencies have cited SOEs, including Eskom and SAA, which carry 
debts of close to R700bn between them, among the major risks to the sustainability
of the nation’s finances.

Mboweni has previously suggested that SAA should either be sold or closed down as
it does not have a future in its current form. “We are not looking at privatising
SAA. We still think we can deal with the challenges faced by the airline,” Mabuza
said on Tuesday.

The national carrier recently stopped flying to several domestic and international
destinations in a bid to cut costs. It has amassed just more than R18bn in losses
since the 2015 financial year and is seeking about R22bn in government bailouts 
over the next three years.

Mabuza said the cancellation of the routes is temporary.

“This too will pass, and SAA will be stronger. We will not give up routes … the 
business is about routes. Any cancellation of routes is temporary,” the deputy president
said, adding that selling off SAA is not on the table.

“That is why we have [put in place] business rescue practitioners. That means the
business is facing problems and must be rescued. We cannot abandon the business,”
Mabuza said. “South Africans want this business; we do not think we have reached
that point [of wanting to sell]. SAA belongs to the people of SA.”

Mabuza also said the government remains confident that Eskom can be turned around
under its new leadership.

“The biggest challenge is the Eskom debt. This is being discussed at the National
Economic Development and Labour Council (Nedlac) … the workers in our country are
amenable to rescuing our public enterprises. If we deal with the debt issue then
we are out of the woods. But I am worried about the culture of non-payment. People
must pay for services.

[Article](https://www.businesslive.co.za/bd/national/2020-03-03-eskom-and-saa-on-road-to-recovery-says-deputy-president/)
by Business Day

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