The cash injection should set a platform for the corporation's financial recovery that includes paying its huge debts, cutting costs, and putting governance systems in place to avoid future wasteful expenditure.
Speaking to Bizcommunity.com last night, 24 November 2009, ‘Save our SABC' Coalition spokesperson Kate Skinner welcomed the news, saying that given the public broadcaster's serious liquidity problems these guarantees will hopefully enable it to borrow money more easily and cheaply.
“An easing of the liquidity problems will create space for the SABC to be stabilised and restored to a sound financial footing. One of the key tasks of the interim board was to ensure the stabilisation of the SABC. It appears that significant progress has been made in this direction,” she said.
An SABC statement yesterday quoted Minister of Finance Pravin Gordhan as saying the remaining R473 million will depend on the development of a detailed project plan by the SABC committing the public broadcaster to explicit revenue targets, and cost-cutting measures to enable effective oversight and monitoring of projections by Government.
Gordhan stressed that these undertakings should be captured in a shareholder's compact to be signed by the new board and minister of communications Siphiwe Nyanda within three months of the new board's appointment to facilitate oversight and monitoring.
Probably wary of the corporation's history of financial irregularities and cover-ups, the coalition warned the SABC - which posted a net loss of close to R1 billion in the last financial year - to ensure that any public money drawn down is well spent.
“It is critical that the SABC be held to account,” Skinner said.
“The SABC is not a ‘normal' state-owned enterprise. Therefore it is important that the shareholders compact does not dictate the vision of the SABC or issues of editorial independence, but rather focuses on ensuring the effective and efficient spending of this public money and made public to ensure adequate transparency,” she said.
She also called on the parliamentary portfolio committee on communications and ICASA to exercise their oversight role with rigour, as regards to the broadcaster's corporate plans, annual and financial reports, and charter and licence conditions, respectively.
Asked if this bailout will put the SABC on the road to recovery, she said: “No, this is just the start of the process. We need to see how the new permanent board performs in terms of its ‘turn-around' strategy. All we have done to date is to stabilise the SABC.
“They need to root out corruption, put in place a new professional management team with a passion for public broadcasting and excellent broadcasting, corporate governance and financial skills.
“They also need to put new sound management, financial and human resource systems in place that deal with issues of conflict of interest. They need to ensure going forward that the money that is spent at the broadcaster translates into excellent public programming on screens.
SABC interim board chairperson Irene Charnley said in a statement: “The Government guarantee, together with the October approval in the Medium Term Budget Policy Statement (MTBPS) of an additional R200m, will enable the SABC to begin the turnaround to developing a vibrant and viable public broadcasting service responsive to the needs of all South Africans.”
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