Get this ungainly beast to fly
The last time the government announced a big programme of state infrastructure spending—in 2004—one of the problems it had to contend with was the mess at Transnet, which was so mired in debt that it needed major restructuring before it could start rolling out new port and rail projects.
And central to that process was the cutting loose of South African Airways, R6-billion in the red on its fuel hedges and desperately in need of a management overhaul. Transnet got rid of the company, but government was stuck with the clean-up bill. The flag carrier was supposed to have been turned around, posting a solid profit last year under energetic new leadership.
The fact that it was back at Pravin Gordhan’s door asking for another R6-billion, just days after Zuma announced a repackaged and expanded set of parastatal spending plans, sounded a distinctly sour note amid the general chorus of approval for the president.
Quite apart from its serial financial delinquency, the fact that the airline cannot fund growth off its own balance sheet or cash flows does not inspire confidence in the funding of the government’s bigger, more urgent plans.
There are plans to incorporate private sector skills, expertise and money in the infrastructure roll-out. The recognition that the state cannot go it entirely alone here is tempered with a healthy determination to watch carefully the terms of engagement with big business, which, let us face it, has a very uneven record in honest dealings with state tendering processes and an ugly history of collusion.
A tough line on corruption, inefficiency and waste, however, will have to start from within the government’s own corridors.
If the state actually does what it says it will—that is, combine its expanding interventions with tighter planning, effective financial management, zero tolerance for corruption and political pandering—the infrastructure drive may indeed be a real sign of better things to come.
And whether it exerts any kind of discipline over SAA will be a key test of its willingness to make—and enforce—tough decisions.