WHO IS TO BLAME FOR SAA'S FAILED PRIVATISATION?

Following the announcement on Wednesday 12 March 2024 by Public Enterprises minister Pravin Gordhan that the Takatso transaction had been cancelled, several pertinent questions arise: Who is to blame? What does it mean for SAA? What does it mean for future privatisations?

- Tim Cohen

Oh, one thing. Did I write ‘privatisation’? My bad. That is not what I meant. We do not use such an ugly word in public anymore. What I meant was a ‘public-private partnership’. This is not the process of the State admitting failure and dumping its badly run hot potatoes into the private sector’s lap. God forbid.

Anyway, assigning blame is usually pretty difficult but in this case, it is easy: I think blame falls very squarely on Gordhan himself. At each stage of the process, Gordhan had crucial decisions to make and he consistently made the wrong ones. That is easy to say in retrospect, I suppose; success in governing is often a very marginal affair.

But still, let us go through those decisions and you will see what I mean. Right at the start of the process, government decided that the political cost of pumping billions upon billions into SAA was (at last) not sustainable, so the idea was to pass that responsibility on to the private sector. Consequently, Rand Merchant Bank was appointed to try to identify possible buyers, which they duly did. We do not know this for sure, but I think it is a pretty safe guess that the demands of the potential partners were pretty steep. At the very least, they would want more than 50% of the equity; nobody is going to take over a state asset in such deep doo-doo without control. There is no conceivable way that RMB would not have told Gordhan this.