THE Treasury has extended a helping hand to the struggling SABC, approving its application for a government bank guarantee of R1,47bn, writes Chantelle Benjamin in Business Day.
This is despite Finance Minister Pravin Gordhan’s insistence recently that he would take a tough stance on the bail-out of state-owned enterprises.
The guarantee would also add to the government’s already onerous debt burden.
But opposition parties and the Save Our SABC Coalition welcomed the move, saying the government had no option but to support the national broadcaster.
The guarantee would allow it to settle debts and start afresh under its new board. The guarantee will be released in tranches, with a draw-down of R1bn made available immediately and the remaining R473m released on the SABC’s submission of a detailed project plan committing it to explicit revenue targets and cost- cutting measures.
This would enable the government to oversee and monitor how the money is spent.
Making the announcement yesterday, Communications Minister Siphiwe Nyanda said his department would ensure that the money was used properly, including to settle urgent outstanding financial obligations.
Tight control measures had been introduced, including regular management reports.
Nyanda believes the guarantee “will go a long way towards stabilis ing the public broadcaster after a very tumultuous period marked by anxiety and uncertainty among staff in particular and the public in generalâ€ÂÂ.
“We hope that the financial injection by the government will help the SABC meet its urgent needs such as payment of outstanding debts and other matters of priority,†he said.
The guarantee comes shortly after the emphatic statement in Parliament by Gordhan that “bail- outs are not going to be an endless mechanism of funding either foolishness, mismanagement, poor judgment, poor strategic leadership or no leadership at all.
“We are absolutely clear about that. We have imposed tough terms on state owned enterprises that require state assistance. Those terms mean that this assistance is not an endless process. It has a very finite purpose, and we expect finite things to be done.
“We expect the right things to happen within state-owned enterprises , otherwise state-owned enterprises themselves must review the purpose for their existence.â€ÂÂ
SABC interim board chairperson Irene Charnley welcomed the guarantee, saying the SABC could begin the turnaround needed to develop a viable public broadcaster.
Click here to read the full report, posted on Business Day's website.
