Treasury insists no funding for SABC unless it meets conditions

The SABC will have to comply with conditions laid down by the Treasury before it can access the R3.2bn that it has requested from the government, Treasury director-general Dondo Mogajane said in Parliament Wednesday.

Mogajane said the conditions related "to getting the SABC in order so that it can sustain itself financially".

The guarantee was refused mainly because the SABC had failed to meet its obligations and the business plan it had presented was not strong enough.

The 11 conditions that had to be met were laid out in a letter sent to the SABC in April. Those included finalising the board which has been accomplished, removing noncore and nonperforming activities, maximising advertising revenues and clawing back expenditure on content.

The SABC, which is the main source of news and commentary for most South Africans, is on the verge of collapse and has warned that it could be forced to go off the air unless the government quickly comes to its rescue. It has requested a R3.2bn government guarantee to stay afloat.

Mogajane was briefing the National Council of Provinces (NCOP) select committee on appropriations on the Appropriation Bill.

Though finance minister Tito Mboweni declined to grant the SABC the guarantee, he previously said in a letter that he recognised the immediate need for the public broadcaster to be given assisted with some form of assistance.

In summing up the debate on the Appropriations Bill in the National Assembly on Tuesday, Mboweni said government financial support for struggling state owned enterprises such as the SABC, Denel and SAA would be released in chunks as certain conditions precedent are met.

There had to be progress in these organisations before the government would grant them funds, the minister said, adding that chief restructuring officers would be announced for each of the entities.

These chief restructuring officers would work with the management of these companies to get them back on track. Mogajane said it was urgent that these chief restructuring officers be appointed.

Mboweni said the allocations for the SABC, Denel and SAA would be made from the contingency reserve, which was increased by R6bn to R13bn in the February budget so the government could respond to requests for fiscal support from SOEs. The Treasury would only be in a position to use the contingency reserve once the Appropriations Bill had been adopted by parliament.

ensorl@businesslive.co.za