70 SA Flyer Magazine
REPORT:
CHRIS
MARTINUS
The end of the Zuma
regime resulted in
a short period of
“Ramaphoria” which,
although it has
already lost some of
its warm glow over
the past few months,
nevertheless has kept
alive the icker of
hope that some degree
of accountability
and transparency
may return to our
ravaged government
infrastructure, state-
owned enterprises
(SOEs) and other
organs of state.
P
RESIDENT
Ramaphosa’s back
is against the wall.
He must attempt to
balance the aspirations
of voters in next year’s
national elections
between the enthusiasm of the masses for
wholesale asset conscation on one end of
the political spectrum, with the desire by the
more conservative drivers of industry and
agriculture to stabilise a tottering economy,
reverse rampant unemployment and rebuild
collapsing infrastructure.
Where does that leave the wholesale
plundering of the scus by top-heavy
government entities and faltering
entrepreneurs? Many businesses see state
capture as the only viable way to avoid
their own headlong slide into the economic
and socio-political abyss. The “middle
ground” between the very rich and the very
poor, which often thrives on corruption and
patronage for self-enrichment is beginning
to scrape the bottom of the gravy barrel
as SOEs, municipalities and state organs
run out of easy income from the taxpayer’s
emptying pockets.
Well, the main persons who have
returned through the ever-revolving
ministerial door, after having been cast into
the wilderness by former President Jacob
Zuma, are Pravin Gordhan and Blade
Nzimande. Gordhan gets the unenviable
task of casting the evil money changers out
of the temples of State Enterprises, while
Nzimande gets the task of cleansing us of
the marauding Philistines who have turned
the Department of Transport into the most
pitiful of our government departments,
(other than Water and Sanitation and Social
Services…). Finance Minister Nene is in
the background trying to balance his wobbly
chair and hoping the legs don’t break off
again.
Both these Ministers are outsiders:
Gordhan’s strident appeals against
corruption, state capture and rent-seeking
have not enamoured him among the
kleptocracy of cadres carefully deployed by
Zuma to support him in his own escapades;
Nzimande is the General Secretary of the
SA Communist Party, a post he has held
AOPA BRIEFING AIRCRAFT OWNERS & PILOTS ASSOCIATION – SOUTH AFRICA
TAPPING INTO THE
GRAVY PLANE
ABOVE: On sale now for installation at all public service buildings.
71 SA Flyer Magazine
for twenty years. The SACP has been
diminishing in signicance and is unlikely
to ever contest elections other than as a
vestigial appendage of the fragmenting
ANC.
As the ultimate centres of state power
behind the aviation industry, both these
leaders suffer debilitating weakness in
a lack of support from the very party
and President who appointed them. An
SAA employee told me this week that
government can never throw SAA to the
wolves, since too many “empowered”
businessmen (of which even Ramaphosa
is an example) rely on income as preferred
suppliers to SAA and other SOEs.
It is hardly likely that Gordhan, despite
his formidable personal reputation, will be
able to charge Jesus-like into the temples
of the money changers and vanquish
them from their rmly entrenched support
base. Nor does Nzimande strike me as
a biblical Samson who can kill lions with
his bare hands, slaughter the Philistine
army with the jawbone of a donkey, or
pull the columns of their temple down on
their heads using just his scrawny SACP
shoulders.
THE FLYING FOUNTAIN OF GRAVY
As the wellspring of gravy begins to
dry up for most government entities,
we see the national crises unfolding:
power cuts, water shortages,
potholes, a rail system grinding
to a standstill and daily
violent service delivery
protests. Resorting to
desperate measures of
increasing VAT, fuel levies,
electricity prices and other taxes on
commodities merely shifts the burden
onto the poor, the very people Ramaphosa
hopes will soon vote for him.
Government has become obsessed
with trying to think up new things to tax,
like the ludicrous and failed attempt to
force registration of generators and solar
panels with a view to creating new revenue
streams. But those in power appear not
to comprehend that the gravy lakes have
dried up, the streams that feed them are no
longer owing, and gravy rain is no longer
falling in their catchment area.
Our CAA is not worried. As I have
discussed before in this column, 75% of
CAA’s income is derived from “passenger
safety charges”. This misnamed levy
collected on every commercial aircraft
passenger ticket, according to CAA’s
2016/2017 Annual Report (which is
available on their website), amounts to a
total of a whopping R445,882,547. The
income from user fees, fuel levies and
Treasury grants for accident investigation
which make up the remaining 25% almost
pales into insignicance.
This chunk of income requires no
direct work by CAA: the safety charges are
collected at no charge by the airlines and
simply transferred into CAA’s account every
month. Indeed, the regulations
even require the airlines to cover the costs
of being audited to make sure they don’t
cheat.
It is notable that during the 2016/2017
year, passenger numbers increased by
4.2%, yet the safety charge was increased
by 8%, increasing CAA’s income by 11.2%
according to their nancials. That 11.2%
number doesn’t seem to add up. It seems
it should closer to 13%, but hey, we are not
accountants.
It also appears from their accounts that
they are amortising their over-collection of
R61 million in passenger safety charges
from previous years into their income.
AOPA has expressed the view in the past
that the over-collection should have
been paid back to the passengers,
but CAA sees it as “nders-
keepers” and to be ltered back
into their coffers a bit at a
time, in 2016/2017 in the
amount of R15.3 million,
no doubt to avoid a large
embarrassing blip in their
nancials.
It is disturbing that CAA has voted
itself a further across-the-board increase in
all tariffs, despite opposition from almost all
aviation stakeholders. This is estimated to
increase CAA’s income by at least another
R60 million, taking increased commercial
passenger volumes into account.
WHERE DOES THE GRAVY FLOW?
Increasing commercial passenger
numbers ensure that CAA’s future income
is very secure in comparison with the
faltering outlook for almost all other state
institutions.
Bearing in mind that CAA’s functions
are largely administrative, it is surprising
that personnel salaries also account for
AOPA BRIEFING AIRCRAFT OWNERS & PILOTS ASSOCIATION – SOUTH AFRICA COLUMNS
GOVERNMENT CAN NEVER
THROW SAA TO THE WOLVES,
SINCE TOO MANY “EMPOWERED”
BUSINESSMEN ARE PREFERRED
SUPPLIERS TO SAA.
ABOVE: Accessorise this T-shirt by
adding a matching red beret.
72 SA Flyer Magazine
approximately 75% of their expenditure.
It is here that some red ags have been
raised from time to time by AOPA. CAA’s
report indicates that 514 personnel are
employed. By comparison, the New
Zealand Civil Aviation Authority which
administers comparable numbers of aircraft
and aviation crews and operators, functions
very efciently with a mere 259 staff, half
that of our bloated and inefcient service
provider.
But to add insult to injury, the senior
staff at CAA are paid truly obscene
salaries. The 2016/2017 report shows
a salary package of R3.5 million paid to
CAA Director Poppy Khoza in 2016. This
was increased to a full salary package and
bonus of R4.6 million in 2017. By simple
extrapolation, this would put Khoza’s
current salary at around R6 million – well
in excess of US President Donald Trump’s
salary and nearly twice the salary of
President Cyril Ramaphosa!
The top 10 CAA executives also earned
an average of around R2.5 million – now
probably closer to R3 million.
At a time when other state institutions
are running out of cash and crying out for
increased tariffs and holding out begging
bowls to Treasury for handouts, CAA
must be a very appealing target for state
capture. The process of regulation-making
at the Civil Aviation Regulation Committee
(CARCom) is particularly vulnerable
to inuence by businesses and pliable
government ofcials. AOPA has been a
squeaking wheel at CARCom for many
years, very much to the annoyance of both
CAA ofcials and other entities who see the
purportedly consultative process as a way
to achieve ends that are not necessarily in
the public interest but could help line their
own pockets.
THE END OF RAASA
AOPA has expressed misgivings
about the establishment of RAASA, the
Recreation Aviation Administration of SA (a
company registered under the Companies
Act) ever since its inception in 2008.
AOPA does not oppose the outsourcing of
CAA functions as such, but the legislative
framework as it stands does not allow this
and, more importantly, does not provide
proper checks and balances for supporting
such a structure.
Most particularly, the Civil Aviation
Act prescribes that licenses, certicates,
registrations and permits is a function of
the CAA and must be performed by its own
employees. Some two years ago, AOPA
provided CARCom with a comprehensive
study of the issues relating to this problem.
The only response, however, was hostility
and numerous attempts to both silence and
discredit AOPA.
RAASA has, as was conrmed by
the Minister a few years ago, received
millions of Rand in funding in addition to
the revenue they generate from issuing
licenses, etc. A document from the CIPC
(the registrar of companies) indicated that
three of RAASA’s directors are current
senior CAA executives, the CAA heads of
nance, legal and safety as well as a former
Director of Civil Aviation. The 2016/2016
report rather interestingly shows that all the
other directors of RAASA are also on CAA’s
payroll. RAASA managing director Neil de
Lange was paid an amount of R1.1 million in
2016 and R1.2 million in 2017.
RAASA is one of those peculiar
non-prot companies that has no
members or shareholders, so its directors
and employees are the only possible
beneciaries of its income. However,
as the CAA report indicates, RAASA’s
internal nances are not available for
public scrutiny. So, we do not know what
remuneration its directors received from
RAASA, if any.
The Civil Aviation Act specically
precludes CAA personnel from holding
directorships, or any other positions, in
other companies. The remuneration of
RAASA employees, who are on the CAA
payroll, appears to breach the Act and
raises a host of conict of interest problems.
The report explains that the CAA
Board is taking measures to integrate
RAASA’s functions within the CAA, rather
than based on a contract with an outside
company. This process is supposed to be
completed in March next year. As such, it is
expected that the functions of administering
recreational aviation will be more efcient
and streamlined, while also ensuring more
transparency and accountability, both to the
public and to the Minister himself.
NO NEW REGULATIONS
It is notable that, as of now, Transport
Minister Blade Nzimande has not signed
a single regulation into effect since
his appointment in February this year.
There have nevertheless been many
proposed amendments to the Civil Aviation
Regulations sent to his ofce, some of
which were ‘recommended’ under rather
dubious circumstances.
We are hoping that he is keeping a
beady eye on our interests in aviation
and will ensure that aviation will not run
off the rails as badly as have some other
transport divisions. A strong, efcient and
accountable CAA would be the promised
land and Nzimande is the only candidate we
have for the job of Moses. We would also
like to see CAA’s bloated income applied
to developing general aviation, rather than
falling through the cracks.
Chris Martinus
President
Aircraft Owners and Pilots Association
– South Africa.
AOPA BRIEFING AIRCRAFT OWNERS & PILOTS ASSOCIATION – SOUTH AFRICA
j
THE NEW ZEALAND CIVIL AVIATION
AUTHORITY ADMINISTERS
COMPARABLE NUMBERS OF
AIRCRAFT AND AVIATION
CREWS AND OPERATORS,
WITH HALF THE STAFF OF OUR
BLOATED SERVICE PROVIDER.
