/ 24 November 1998

Breakthrough in Transnet pension saga

OWN CORRESPONDENT, Johannesburg | Tuesday 11.00am.

THE government has agreed that South African Airways will take responsibility for R1-billion of Transnet’s pension fund deficit and debt, laying the groundwork for SAA’s partial privatisation and balance sheet restructuring.

Business Day reported on Tuesday that the government and Transnet will absorb SAA’s remaining R3-billion portion of Transnet’s liabilities, it was agreed at an interministerial cabinet committee meeting.

The committee is still assessing the impact of the move and examining what to do with the remainder of the R10-billion pension fund liability and debt.

The government, Transnet and its employees recently agreed to share the huge pension fund and debt burden. However, this raised problems for the loss-making SAA which had scheduled partial privatisation for April next year.

Public enterprises department head No monde Mapped said on Monday that the new deal has opened the way for SAA privatisation, but that the R1-billion responsibility will mean that the company will probably only start making a profit in two or three years.