ANALYSIS | Brinkmanship, bankruptcy and politics: SAA and what might happen at Eskom

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ANALYSIS: Brinkmanship, bankruptcy and politics: SAA and what might happen at Eskom | PieterDuToit

When Finance Minister Tito Mboweni addressed the media ahead of delivering his first Medium-Term Budget Policy Statement in October last year he didn’t beat around the proverbial bush and straight-up disputed the need for state-owned national airline SAA.

But right-sizing, or winding up SAA might prove to be a dry-run for a much bigger battle that lies ahead: that of Eskom. And although the threats by Irvin Jim, the general secretary of Numsa, the National Union of Metalworkers of SA , of"the mother of all strikes" are dramatic and vocal, it’s nothing to what might happen when Eskom is put on the chopping block next.

Numsa’s argument that nobody listened to it while Myeni and her hangers-on further dismantled the company’s finances surely is valid and true – but then, SAA has been in a tailspin for years. And unions have been pacified with generous wage increases at the same time. In this game of brinkmanship, it is Mboweni staring down the unions, and in the end, it could finally be the unions – and Jim – who will be responsible for the end of SAA and the biggest restructuring of government’s balance sheet in decades.

South Africa’s debt burden will however be significantly eased, and the private sector will inevitably step in to fill the void left by SAA.Could this be a precursor to events at Eskom? Because whichever way you spin it, the electricity utility needs the same shock as the one delivered to SAA this week. Only in a much higher voltage.

The Eskom restructuring has already started. The separation of the company into three subsidiaries has quietly begun and although there aren’t any indications of retrenchments yet there are plans afoot to rationalise the company’s workforce of 46 000 employees into something leaner, more efficient and eminently more affordable.


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