While the government had to urgently intervene over the weekend to bail out an absolutely bankrupt South African Airlines (SAA) with R2,2 billion, it is evident from the Minister of Finance’s response to a question by the FF Plus that the SAA has been wasting money by offering sponsorships of hundreds of millions of rands.
According to dr. Pieter Groenewald, leader of the FF Plus, since 2013 sponsorships amounting to R127 million have been offered to, amongst others, the Springbok Rugby Team, the country’s Olympic Team, the Miss South Africa competition, the African Games, the International Jazz Extravaganza and Bafana Bafana.
The soccer team is being sponsored with R25 million per year until March 2021 so the total for the sponsorships amounts to a staggering R200 million.
The life buoy of R2,2 billion was thrown to the SAA over the weekend so that it can pay its outstanding debt to the Standard Chartered Bank. According to the Minister’s answer to the FF Plus’s question, the sponsorships are offered on a value-in-kind basis and not cash, which basically comes down to free flights.
With the last meeting of the parliamentary portfolio committee at the end of March this year, it became evident that SAA’s losses for the 2017 financial year could amount to up to R4,5 billion, while the airline will have to repay R8,9 billion in loans during the current financial year. The government has now paid R2,2 billion of this debt to the Standard Chartered Bank.
Dr. Groenewald says that it is unacceptable that the bankrupt SAA, which had to be kept going over the last few years with billions of rands of tax money, offers sponsorships amounting to millions of rands, even if the said sponsorships are in the form of free flights.
“The fact that the sponsorships were in the form of free flights doesn’t make it any better because those flights’ airfare would have been a form of income for the SAA and it could have relieved some of the pressure on the taxpayer. Offering sponsorships to sportsmen is not wrong in principle, but then the institution must be able to afford it and should not needlessly burden the taxpayer.
“The underperforming Bafana Bafana team is currently ranked 62nd by FIFA and for that reason they are struggling to get sponsorships from businesses. To draw a comparison in rugby terms, a country like Venezuela has the same ranking.
“It is unfair that both the government and the public have to sponsor a team that, like the SAA, underperforms,” says dr. Groenewald.
Contact number: 083 419 5403
NATIONAL ASSEMBLY
QUESTION FOR WRITTEN REPLY
QUESTION NUMBER: 1617 [NW1822E]
DATE OF PUBLICATION: 9 JUNE 2017
1617. Dr P J Groenewald (FF Plus) to ask the Minister of Finance:†
(1) Whether South African Airways offered any sponsorships in the financial years (a) 2013-14, (b) 2014-15, (c) 2015-16 and (d) 2016-17; if so, (i) to whom, (ii) for what amount, (iii) for what period and (iv) what was the activity in each case for each year;
(2) whether he will make a declaration about the matter? NW1822E
REPLY:
(1) Yes, South African Airways had sponsorship commitments in the financial years (a) 2013-14, (b) 2014-15, (c) 2015-16 and (d) 2016-17. All these sponsorship sponsorships were approved in accordance with the company’s DOA requirements and followed internal approval process. The sponsorships for the above period are listed in the table below:
Sponsorship Property Right Holder Value Period
Springboks SA Rugby R22.5m per annum 2013-14
SA Olympic Teams SASCOC R6m per annum 2014-15
Springboks SA Rugby R22.5m per annum 2014-15
SA Olympic Teams SASCOC R6m per annum 2015-16
Springboks SA Rugby R22.5 per annun 2015-16
Miss South Africa Sun International R594k 2015-16
World Routes UBM R1.5m 2015-16
NBA Africa Games NBA Africa R1.3m 2015-16
International Jazz Extravaganza Teacup Projects Proprietary Limited R1.1m 2015-16
Bafana Bafana SAFA R10m first year
R25m per annum thereafter 2016 – 17
SA Olympic Teams SASCOC R8m per annum 2016-17
Miss South Africa Sun International R596k 2016-17
Notes:
o The SA Rugby sponsorship ended on 31 December 2015.
o The SASCOC sponsorship ended in March 2017
o The SAFA sponsorship for BAFANA BAFANA is a five (5) year agreement that started in April 2016 and ends on 31 March 2021.
o All SAA sponsorships are offered strictly on a Value-In-Kind (VIK) basis. This means the value of the tickets offered and there is no outlay of cash for sponsorship
o The sponsored parties are liable for airport taxes
(2) the details/declarations are included above.
;
