LAST year, South African Airways (SAA) chairwoman Dudu Myeni blocked the airline from signing a deal with Emirates Airlines that would have earned it R1.7bn.
Now Ms Myeni has reportedly undone a deal with Airbus that would have saved the cash-strapped SAA R1.6bn.
A total of R3.3bn has effectively been wasted by Ms Myeni. That money would have been more than enough to fund the shortfall SA’s universities will have this year because of the no-fee increase that has been agreed.
The money wouldn’t be quite enough to pay for the new jet, which is reportedly being bought to fly President Jacob Zuma around. But then, what Mr Zuma and his close friend Ms Myeni apparently share is a somewhat warped sense of priorities.
In Ms Myeni’s case, the priority seems to have been her desire to ensure some "rents", as economists call them, were extracted, presumably by people she knows, on SAA’s purchase of a fleet of new Airbus planes.
SAA does not have the money to buy the new 20-aircraft fleet it had originally planned. That is why, as part of its 90-day turnaround plan earlier this year, it negotiated an agreement with Airbus to waive the R1.6bn payment which was due on the 10 aircraft that hadn’t yet been delivered, but that SAA cannot now buy.
Instead, it was planning to lease aircraft. But Ms Myeni had other plans, writing to Airbus in September to demand that an unnamed African leasing company act as financier for purchase of the new planes.
That raised ethical concerns at Airbus and prompted it to demand payment of the R1.6bn.
Ms Myeni’s conduct is a shocker. She has undone a rescue deal that was negotiated and approved by her own shareholder ministry, the Treasury, which was put in charge of SAA last December after Ms Myeni flouted instructions by her then shareholder, the Department of Public Enterprises.
She and her board, which refused to approve the deal with Airbus, have undermined their own company’s turnaround plan, which is surely a breach of their fiduciary responsibilities.
And the bottom line is that SAA, which has reportedly already defaulted on a recent R500m payment to Airbus, does not have the R1.6bn. There may be no option but for government to pay the money — and a cash-strapped fiscus doesn’t have R1.6bn to spare either.
For a state-owned entity to put government in a position in which it is forced to make a payment it never planned for is untenable and unprecedented.
That was the message in a scathing letter that the director-general of the Treasury, Lungisa Fuzile, wrote to SAA’s finance director, who had alerted the Treasury to the problem.
He asked bluntly why board members did not think their conduct amounted to a breach of their fiduciary responsibilities.
But does Ms Myeni care? Her track record suggests she does not and the Treasury’s letter reflects the enormous frustration government officials feel at Ms Myeni’s conduct.
It seems to reflect, too, her perception that the airline for which she is responsible is there to be plundered, rather than fixed.
She appears to feel she can act with impunity. And so far, any and all attempts to rein her in have failed.
This is where the capricious appointments at public entities that the president influences become absolutely lethal.
Incompetence is one thing, and there is a fair amount of that in the governance structures of SA’s state-owned entities. But the deliberate and destructive flouting of the principles of governance and of plain good business is entirely another.
The damage capriciousness has done to SA’s national airline will not be reversed easily, if it ever can be.