SAA cuts defended; Cosatu wants prescribed assets; Arms sales re-ignited; Stage 1 loadshedding

By Linda van Tilburg

  • The administrators for SAA, Les Matuson and Siviwe Dongwana have defended their decision to cut routes as part of a turnaround plan after objections from President Cyril Ramaphosa, the government and labour unions. SAA will halt services to nine international cities including Hong Kong and Sao Paolo and cease all local services except those between Johannesburg and Cape Town. The administrators said the move was in the best interest of SAA and they were intended to make the airline commercially and operationally sustainable, free from the requirement of future funding from the government. The Sunday Times reported that South African banks refused to provide an R8bn loan to enable a turnaround even if the government guaranteed the funding. Privately-owned airline, Airlink said it had registered its interest with the business rescuers in buying some of SAA’s assets and could expand on routes that SAA is discontinuing.
  • Cosatu said it wants the R104bn of Eskom debt held by the Public Investment Corporation to be converted into equity owned by workers. Cosatu General Secretary Bheki Ntshalintshali wrote in Business Day it is part of a deal that Cosatu is trying to reach with business and the government to rescue Eskom. Ntshanlinthsali said it would result in workers becoming shareholders in the power utility. He also recommended that at least 10% of all pension funds, whether private or government owned be invested in government bonds geared towards social investment and employment creation. Bloomberg reports that raising the possibility of so-called prescribed assets was likely to anger investors who are opposed to having their investments dictated by Government.
  • Health officials in Africa are bracing themselves for the worst of the coronavirus and South Africa is according to Bloomberg seen to be one of the countries especially at risk according to the World Health Organisation and has been identified with Kenya and the DRC as priority zones for containing the spread of the virus. But not a single case has been confirmed in Africa so far. Bloomberg reports that South Africa has been conducting tests for the coronavirus for other countries. National and provincial response teams have been set up by South Africa and 300 health officials have been designated to ports of entry and have begun screening all travellers from China. A top airline doctor, Dr David Powell has given out advice on the best way to avoid the coronavirus and it said “forget masks, the best way to avoid catching the virus is frequent hand washing and avoid touching your face.”
  • Reuters reports that the South African Government is seeking to unlock stalled arms sales to Saudi Arabia and the United Arab Emirates by amending a clause in an export document that requires the inspection of the countries facilities to make sure weapons aren’t transferred to third parties or lead to the violation of human rights. This follows after local defence firms have been lobbying the government to change the clause which they say is threatening hundreds of jobs if the clause was not amended. The National Conventional Arms Control Committee confirmed to Reuters that an amendment which would state that ‘on-site verification of the controlled items may be performed through diplomatic process’ has been approved by them.
  • And a quick look at what can be expected this week: Eskom said that loadshedding 2 was stopped last night and from this morning it will implement Stage 1 as there had been an adequate recovery in emergency services. While dam levels have recovered enough to allow for a reduction to loadshedding, the power utility said work still needed to be done to improve diesel stocks. Eskom said the risk of loadshedding however remained for the entire week. Manufacturing and mining data from December are expected this week with the impact of loadshedding on the mining industry expected to be reflected. Retail sales figures for January are due on Wednesday.
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