SA Express, suppliers in dispute over irregular contracts

SA Express, suppliers in dispute over irregular contracts
SA Express (SAX), another embattled state airline, is entangled in lawsuits amounting to millions of rands with suppliers over some of the contracts that were irregularly awarded.

The parties have taken each other to court to demand money and this has pushed the contingencies against the airline.

In audited financial statements released recently the airline says some of the contracts were deemed irregular and some of the claims against it were inflated by contractors.

The airline says it is involved in a R4.7 million legal claim against one company over the contract it was awarded by the airline.

The airline believes the contract was irregularly awarded, but the affected contractor launched a counterclaim following a settlement agreement reached with its former chief executive.

The airline is locked in another dispute over a lease deal of R14m with another company.

“SAX has appointed external attorneys to resolve the matter,” it stated in its audited financial statements.

The airline is awaiting judgment on a dispute of payments after a supplier demanded R29.9m in payment for a lease of its fleet. But the airline said it was disputing R7m of the payment.

In another dispute over an engine lease deal with another firm, it said the company was claiming R26.7m in lease fees from them. The company concerned issued a settlement agreement early this year, but the airline does not want to sign it.

“SAX is not prepared to sign the settlement agreement as the amount is still being verified by SAX. SAX has appointed external attorneys to resolve the matter. This contract was also deemed irregular,” it stated.

SAA has also been buckling under pressure, with the company reaching a deal with unions after an eight-day strike.

The National Union of Metalworkers of South Africa and the SA Cabin Crew Association had embarked on a strike to demand salary increases. A deal brokered by the Commission of Conciliation, Mediation and Arbitration resulted in a 5.9% increase to come into effect next year.

SAA has said it would need R40 billion to cover all its financial obligations.

The National Treasury had committed to give it R9bn to pay off its creditors.

However, the airline would need more money next year.

The national carrier said in the past it would be able to break even in 2021. But this would have been dependent on it meeting a number of measures to turn around its finances.

Sunday Independent