News

R1.4bn bailout for SABC

November 25, 2009 Edition 1

Sapa and Political Bureau

JOHANNESBURG: The SABC will receive a bailout of over R1 billion, Communications Minister Siphiwe Nyanda said yesterday.

"We hope that the financial injection by government will help the SABC meet its urgent needs, such as payment of outstanding debts and other matters of priority," Nyanda said in a statement.

Finance Minister Pravin Gordhan approved the cash-strapped public broadcaster's application for a government guarantee of R1.473bn.

According to the Treasury, a "draw-down" of R1bn would be made available immediately.

"Through newly introduced tight control measures that include regular management reports, the shareholder will ensure that the money given to the public broadcaster is utilised properly and to settle urgent outstanding financial obligations," the statement read.

The remaining R473 million would be subject to the broadcaster presenting a plan with clear revenue targets and cost-cutting measures, to enable effective oversight and monitoring.

Nyanda thanked Gordhan and the SABC board for their work.

"The SABC is a national asset that needs to be guarded with jealousy by those put in charge of looking after it on behalf of all South Africans."

Earlier this month, Parliament's communications portfolio committee was told by the SABC interim board that the ailing broadcaster would begin turning a profit by 2012.

The broadcaster planned to repay all its debts by the end of the 2014 financial year.

It was granted R200m by the Treasury in October. The SABC would get this between November and March and would pay for commissioned local content.

Its application for the five-year government guarantee of R1.4bn would "allow the corporation to borrow money from institutions".

The committee heard that the corporation's losses stood at R910m, but this figure was expected to start dropping.

The SABC had also run an overdraft of between R580m and R600m since March, the start of the current financial year.

Cost-cutting measures and a turnaround strategy implemented by the interim board in the past four-and-a-half months had saved the corporation about R65m.

Interim SABC board chairwoman Irene Charnley said the interim board had already started identifying cost-cutting measures and putting in place governance systems to guard against wasteful expenditure.

Communications Ministry spokesman Tiyani Rikhotso said the intervention would help stabilise the SABC after prolonged periods of uncertainty among staff members and the public.

However, DA spokesman on communication Niekie van den Berg condemned the bailout, saying it brought the amount of assistance to state-owned entities to R243bn in the last four years. "This is an enormous sum of money that could have made sizeable inroads into the service delivery backlogs in this country," Van den Berg said.

He said the broadcaster's losses resulted from financial mismanagement and "mass fruitless and wasteful spending". "The public should not have to pay for this. Those responsible must be brought to book," he said.

Meanwhile, it has emerged that former SABC executive Solly Mokoetle was likely to be named as the new group CEO.

The Cape Times was reliably informed yesterday that Mokoetle, who was chief operations officer at the SABC when he left in 2006 to take up a post at Telkom Media, was set to take over the hot seat vacated by former group CEO Dali Mpofu after an acrimonious court battle.

But Mokoetle yesterday denied he was rejoining the corporation.

"I don't know about that. I am in a job right now... I have not been approached," said Mokoetle, who is chief content officer at Super 5 Media, formerly Telkom Media.

Asked whether Mokoetle had been appointed, Charnley said: "I don't know what they are talking about. When we make the appointment, we will make an announcement."