18/10/2017 13:02 SAST | Updated 18/10/2017 13:02 SAST

Decision On PIC Funds To Save SAA To Be Made Next Month

Parliament's standing committee on finance will make its final decision on the use of PIC funds to aid ailing SOEs before the end of November.

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Waldo Swiegers/Bloomberg via Getty Images

Parliament's standing committee on finance will make its final decision on the use of Public Investment Corporation funds to aid ailing state-owned enterprises before the end of November.

In a statement on Wednesday, committee chairman Yunus Carrim said following a briefing by the Government Employees Pension Fund (GEPF), the PIC and trade unions on Tuesday, another meeting will be scheduled before the end of November when a final decision will be taken.

November's meeting will include presentations made by National Treasury, the GEPF and PIC, with the attendance of its chairperson and deputy minister of Finance, Sifiso Buthelezi.

"It is after that briefing that the committee will take its final decision," Carrim said.

However, the committee agreed that there should be appropriate representation of the trade unions of the GEPF members on the PIC board and that consideration needs to be given to amending the PIC's Act to provide for this.

"The PIC should consider investing in projects that promote inclusive economic growth, job-creation, infrastructure development, the reduction of social inequalities, and the interests of mainly the poor and lower-income strata," Carrim said.

"The trade unions are correct that this should not include investing in ailing SOEs that are badly governed, mismanage their resources, serve the narrow interests of an elite, do not advance the country's developmental needs and will not provide an adequate return on investment for the members of the GEPF."

The committee believes the PIC should seriously consider the trade union's proposals on an appropriate housing loan scheme for public sector employees who do not qualify for a loan from the commercial banks.

"From what the committee can tell, the PIC has performed well, including through securing above-inflation returns on investment; receiving unqualified audit opinions over many years, including the Auditor-General Award for clean audit in 2017," Carrim said.

"It is not clear to the committee why [Gigaba] wants a forensic investigation of the PIC's investment decisions and we believe he needs to consult the trade unions on this."

Last month, media outlets reported that Treasury was pressuring the PIC to provide as much as R100-billion to fund struggling SOEs.

This came after Gigaba told the National Assembly that it was considering various options to recapitalise South African Airways, which would include using funds from the PIC.