Led by their former  Finance Minister Pravin Gordhan, South Africans breathed a sigh of relief when President Cyril Ramaphosa scrapped plans to buy a nuclear power plant from Russia that would have been ruinously expensive.

But it is not over.

Energy Minister Gwede Mantashe says this week that South Africa is still in the market for  nuclear energy, provided it can be purchased economically.

This is necessitated by  the financially hamstrung Electricity Supply Commission becoming  a millstone around the exchequer’s neck, by failing to meet its crippling debt burden. 

The Commission, which once sold power to all of South Africa neighbors and produced cheap electricity that was a loadstone to foreign heavy industrial investors,  is now no longer able to meet South Africa’s domestic needs with its pool of aged and poorly maintained coal-fired power stations.

The daily blackouts are proving to be an  deterrent to those very investors the power once attracted.

Mantashe is adamant SouthAfrica will not go for the big bang approach to nuclear energy taken by Jacob Zuma.

The disgraced former President now says ruefully if his nuclear plans had been allowed to come to fruition, South Africa would have been saved the rolling blackouts – known euphemistically as load shedding –  it is now experiencing.

Mantashe offers an altogether more cautious approach:

“It comes back to a resolution we took as a government: not going big bang  to nuclear , but going at a pace and price that the country can afford. Go modular, go at a pace and a price that the country can afford.”

He says the state’s Integrated Resource Plan contains provisions for nuclear energy, but acquiring it will first need approval by government.

The former trade union leader and secretary general of the ruling African National Congress, Mantashe now heads a merged Energy and Mineral Resources Ministry.

He says South Africa must plan for a new nuclear plant to come on line after 2045.

Until then, the country’s only nuclear plant at Koeberg, outside Cape Town, will have it life extended.

Local business has reacted cooly to this development.

The general belief  is that the promises made to Russia by Zuma were  secured with hefty bribes.

Zuma is facing corruption charges and further evidence of this is expected to come to light before the judicial commission on corruption which is known in South Africa as state capture.

“The fact that we suspected corruption,” says Mantashe of the Russian deal, “ does not mean nuclear energy is irrelevant for South Africa today.”

Whether a search for affordable nuclear energy will once again bring France into the equasion is uncertain.

Mantashe reference to the  use of modular nuclear technology at a pace it can afford – indicates the construction of smaller plants.

Investors warn that nuclear energy production of any size is expensive.

Economic realities – a soaring unemployment rate of more than a third of the workforce out of jobs and youth unemployment exceeding  50% – and sluggish Gross Domestic Product growth will keep  South Africa out of this market for the foreseeable future.

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There’s a message for flat-broke South African Airways: hang in there!

It runs in parallel with Public Enterprises Pravin Gordhan’s warning that the airline must clean out corruption if it hopes to survive.

And it supersedes the call by Finance Minister Tito Mboweni that that company, which has not made a profit since 2011, must go to the wall.

The latter is perfectly right in saying no bank or enterprise would get involved with SAA in its current financial state.

But Mboweni’s been repudiated by President Cyril Ramaphosa because, he says, closing the airline would necessitate immediate repayment of its R22 billion debt. This would enormously damage the fiscus.

There’s speculation that Ramaphosa’s remarks have turned his new finance minister into a lame duck: a political has-been who is allowed to say what he wants because he  is only serving his time until after next year’s election.

In fact, Mboweni might have been directed to throw a stone into the bush to see what reaction he could provoke from SAA staff and trade unions who have a veritable bottle of bitter pills to swallow if survival is the option.

These range from exposing the corruption within their ranks to accepting marginal salary increases at best.

My introductory message is based on African aviation predictions.

If SAA can survive it can pick itself up on the approaching boom in African air travel.

IATA figures show the increase in air traffic between sub-Saharan Africa and China will run at 11% over the next decade which will place it among the fastest growing routes on the planet.

Projected traffic between South Africa and China is pretty much in line with this.

China is projected to buy 7690 new aircraft by 2037 with a staggering price tag of $1,2 trillion.

This makes the contest between Airbus and Boeing  for sales to China the most interesting aviation battleground.

US President Donald Trump’s trade war with China is doing Boeing no favours  in this dogfight.

Just this week, Airbus executives are in Beijing talking about the sale of 180 Airbus A320s at price of $18 billion dollars.

If it does get to contest the skies tomorrow, SAA will face new competition.

As US voters cast their ballots in the midterm elections, the Airbus 330-800, which will be the warhorse in that battle, made its maiden flight in Toulouse.

The wide-bodied liner with a capacity of 257 passengers is powered by Rolls Royce Trent 7000 engines that are quieter than their predecessors and 14% more fuel efficient.

Air Mauritius, Air Senegal and RwandAir have firmed up their orders for the new aircraft.

The nascent Uganda Air has signed a memorandum of understanding for two A330-800s.

Nigeria that has taken an on-off approach to reinstating a national carrier could add to the competition

However, there is plenty for everyone. 

The dearth of road and rail infrastructure makes air travel between African countries –  and particularly the  movement of perishable goods – indispensable as their population grows to 1,4 billion.

Ethiopian Airlines, which has a fleet more than twice the size of SAA’s, will indubitably remain the continental giant and an example the South African carrier should emulate wherever possible.

It’s major competitors are not SAA, Kenya Airways and Egyptair but Qatar, Emirates and Turkish Airlines.

Its growth has come from a protected regulatory  framework, the cross subsidization of airport revenue and concessionary fees at Ethiopian airports.

Competitive pricing has enabled it to make the frankly substandard Bole International Airport in Addis Ababa a hub competing with Singapore, Istanbul and Dubai.

The bulk of Ethiopia Airlines’ planes are wide-bodied liners from the Boeing and Airbus range. 

The fleet is constantly updated with planes being  exchanged every six-and-a-half years.

Somehow SAA has to change its message from “ah, if only”  to becoming the Little Red Engine saying: “I think I can.”

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He was speaking to staff of South African Airways following last week’s assertion by Finance Minister Tito Mboweni that the the loss-making airline should be closed down.

Pravin Gordhan says eight months into the corruption-fighting Presidency of Cyril Ramaphosa, the staff of  SAA is still protecting corrupt colleagues.

Gordhan does not agree with Mboweni  that South African taxpayer should not have to finance an airline the country can’t afford.

Mboweni has drawn flak for his remarks at a New York investor conference from the executive of the ruling African National Congress and the unions representing the airline’s 8000 employees.

Gordon tells the employees if they want SAA to survive they must clean out the corruption that has plagued it for years.

“One of the problems they have is  bad decisions. But they have also been badly affected by corruption in the past. This is a matter we have to deal with and expose. We still have a situation today where key parts of an aircraft were, for example, bought at a 50 to 100% premium through middle people rather than buying directly from the original equipment manufacturer. We cannot continue. On the one hand they say we want a bail out and on the other hand we want to carry on feeding pockets that should not be fed,” said Gordhan.

Head of the  SAA pilots association Grant Back welcomes Gordhan’s inspirational speech to them.

He recognizes that they will have to fight corruption and says the airline is in desperate need of  dynamic leadership.

The pilots hope the whole board of SAA will back the chief executive Vuyani Jarana’s turn around strategy to end seven consecutive loss-making years.

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He’s brought back ministers sacked by his predecessor Jacob Zuma that will be popular with investors and the market.

The opposition has criticized his failure to downsize the executive because, he says,  this is still under review.

ends intro

President Cyril Ramaphosa says the Cabinet announcement was 90-minutes late because he had to consult with ministers who were appointed and some who were leaving.

The biggest compromise is his naming Mpumalanga premier David Mabuza as his Deputy President.

Mabuza, who is also deputy president of the ANC is credited with producing  the delegates that gave Ramaphosa his narrow victory as party leader last December.

Former finance minister Pravin Gordhan returns as Minister of Public Enterprises.

Nhlanhla Nene, sacked by Jacob Zuma, makes a comeback as Finance Minister.

ANC national chairman Gwede Mantashe, who has a background of leading a miner’s union, is appointed Minister of Mines.

Communist Party leader Blade Nzimande also makes a return to Cabinet as Transport Minister.

Lindiwe Sisulu, widely tipped to be Ramaphosa’s second-in-command, comes in a Minister of International Relations and Cooperation.

Malusi Gigaba, much criticized for his connection to the Gupta family that’s been accused of state capture with the Zuma administration, has been moved from Finance to  Home Affairs.

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This time it’s law firm Hogan Lovells accused of helping hide state corruption and complicity in attempts to  loot and rob the taxpayer.

Ends intro

South African-born Lord Hain says Hogan Lovells, hired to probe corruption in SARS, actually  engaged in a fatally flawed whitewash of graft in South Africa.

Former  finance minister Pravin Gordhan says Hogan Lovell back pedaled on its Investigation into former SARS executive and alleged money launderer Jonas Makwakwa.

Hain’s asking the British regulator to discipline Hogan Lovell who deny any wrongdoing.

Hain says the British firm helped the Guptas gain influence in SARS.

He maintains  Hogan Lovell’s is either a willing gullible or a malevolent accomplice.

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He’s seen foreign affairs chief Maite Nkoana Mashebane and Finance Minister Pravin Gordhan.

Britain’s Finance Minister Philip Hammond will see business leaders at the Johannesburg Stock Exchange this evening and move on to Cape Town tomorrow.

He’ll meet investors into Britain at functions organized by the Tutu Foundation and the Nelson Mandela Foundation

Hammond will impress on them Britain’s commitment to forming even stronger global ties as the country prepares to leave the European Union.

He’ll make similar trips to Japan and South Korea next week.

South Africa is Britain biggest export market in Africa and bilateral trade reached nearly R 138- billion last year.

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They say in an open letter to Zuma that the spat between the Hawks and Gordhan threatens to devastate the economy.

ends intro

Business Leadership South Africa president Saki Maconzoma says 18 months of work done by Finance Minister Pravin Gordhan and others to stave off a credit ratings downgrade to junk status has been jeopardised .

The president needs to act urgently.

If necessary he could  put the matter in the hands of the ombudsman, known here as the public protector

The letter was inked before Gordhan announced he would not present himself for questions under warning by the Hawks, who are investigating the formation of a special spy unit at the South African Revenue Service after Gordan left as taxman to become Finance Minister.

Zuma has issued a statement saying he has full confidence in Gordhan but he doesn’t have the power to stop the Hawks investigation.

Civil society members were at the Hawks headquarters in Pretoria yesterday (Thursday) when three of Gordhan’s colleagues made warning statements.

Their lawyer said no charges were preferred.

Former Constitutional Court judge Johan Kriegler says there’s not a shred of evidence against Gordhan

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