Finance Minister Malusi Gigaba says steps are being taken to address the challenges faced by South African Airways (SAA).

Addressing Members of Parliament (MPs) at the Old Assembly Chamber in Parliament on Friday, the Minister said while the airline is faced with external market challenges, as is the case with other airlines, there were internal matters that SAA is looking at to bring stability in governance and to also ensure the airline’s liquidity is protected.

The Minister was accompanied by SAA’s top leadership, including Chairperson Dudu Myeni and newly appointed CEO Vuyani Jarana.

“There are far deeper challenges that we are facing at the airline that we need to address and some of those are just quick win decisions, we need to deal with revenue management, we need to ensure that our IT systems enable us to exercise far greater control and management of internal governance processes and business and commercial processes.

“We also need to deal with a whole range of decisions which include the route networks, which includes the strategic use of our metal, which include ensuring that we rationalize the incentive schemes of our pilots. It remains a daunting challenge … that the incentive structure of our pilots in particular costs the company enormously when you compare with other airlines of similar size in other countries and we need to address the issues of the productivity of our pilots in comparison with the pilots of other airlines of comparative size,” he said.

This comes as the SAA Board and top executives work around the clock to implement the turn-around strategy that is aimed at bringing stability at the airline.

The Minister said steps that are being taken to address the cash flow and the liquidity challenges that the airline faces “are issues of the greatest interest to the shareholder, which we have instructed the board to deal with as a matter of urgency because we don’t need to do something that is so huge in order to address the liquidity challenges”.

“There are quick wins, there are strategic decisions that the shareholder is also taking, which we will announce at the Medium-Term Budget Policy Statement (MTBPS) to assist the airline to address these challenges and there are matters of the medium and long-term nature that the board has been instructed to take and that have been reported to me to be taken,” he said.

The Minister said to address stability and governance, the appointment of the new CEO, was one of the measures he recently announced as part of the 14-point plan aimed at instilling confidence in the economy.

He said he was hopeful that Jarana’s appointment would bring about stability at the airline that has had five CEOs between 2013 and 2017.

Jarana was the Chief Officer for Vodacom Business at Vodacom Group LTD, a position he has held since 2012. He is also a member of the core leadership team of Vodacom Group responsible for the enterprise segment across the continent.

“[Jarana] brings a wealth of experience which we think will be very vital to the airline. As you know, the CEO on his own is not going to solve the challenges that are facing the airline. It is an important intervention, it is an important step,” he said.

The Minister said Jarana has some work cut out for him in order to turn the airline around and address the challenges which are being faced.

“And so the CEO, as important as that decision is, is only but one step in a string of decisions that we need to make in order to address the challenges facing SAA.”

Jarana said, meanwhile, that together with the Board and exco, he would focus mainly on stabilising the airline and ensuring that it addresses key liquidity issues and address key balance sheet issues as well.

“I think in this we want to make sure that we do not allow for what the market is doing to take the airline down. We need to respond in terms of how we defend. And then we can build from that point,” he said.

He said the airline was looking at five key areas aimed at improving the state of finances at the airline, and this includes route rationalisation, which will result in a saving of R900 million. Other cost optimisation measures that includes fuel management would save the airline an additional R520 million by the end of the 2017/ 18 financial year.

Fleet management will also be an area of focus, and over the next few months, SAA will work towards retiring five white body aircrafts.

Jarana also said the airline would look at ensuring that the organisational structure is managed better, and that they don’t fill vacancies that are not needed.

By Fasika Tadesse

Ethiopia has earned 7.8 million dollars from the export of 2,031kg of the newly discovered precious gemstones of sapphire and emerald.

The exported sapphire is blue, and it was extracted from Tigray Regional State in two Weredas amounting to 31kg and helped the country to generate 180,000 dollars.

Emerald was discovered in Guji Zone, Oromia Regional State, generating around seven million dollars of foreign currency from the export of 2,000kg of the precious mineral.

Three Kebeles in Mereb Leke Wereda, namely Awet, Tila and Hadush Simehden, are the areas where the sapphire was extracted, in addition to Medego Kebele in Lailay Maichew Wereda.

So far, Tigray Regional State has extracted 51.5kg of sapphire. The mineral was discovered in November 2016, then five months later the extraction was started. About 10,000 people were involved in the extraction of the mineral in the region.

The precious green gemstone, emerald, was discovered during the beginning of 2017 in Oromia Regional State, and so far it has created job opportunity for 30,000 individuals who live in the area.

These minerals were mainly exported to Switzerland, Australia and the US. The two gemstones are currently extracted by artisanal miners who are organised in unions and cooperatives.

“The extraction has not yet entered into a well-organized system as farmers from the area are currently extracting it,” said Fiseha Merssa, director of mineral license & administration at the Tigray Water, Mines & Energy Bureau.

The Ministry of Mines, Petroleum & Natural Gas (MoMPNG) has not yet made any assessment to discover the reserve of the country for these precious minerals, according to Kiros Alemayehu, acting communications director of the Ministry, but he asserted that they are planning to commission studies for the discovery of the nation’s deposits of these gemstones.

“If large-scale miners came, we would proceed with them by the legal frameworks we have been administering gemstones, such as opal,” Motuma Mekassa, minister of MoMPNG told Fortune.

During the just-ended fiscal year, the country earned a total of 231 million dollars from mineral exports, out of which 3.4pc was from the sapphire and emerald.

Although there is no geological map which locates the reserve of sapphire, the government got a signal that the mineral exists in Oromia and Southern Nations, Nationalities & Peoples’ regional states.

“We have discovered that sapphire is also deposited in our region,” said Jarso Edema, deputy head of the Oromia Water, Mines & Energy Bureau.

Sapphire is the most valuable and expensive blue gemstone in the global market next to diamond. In the world market, a polished blue sapphire sold at a price of up to 15,000 dollars a carat. Emerald is sold for 4,000 dollars to 10,000 dollars per carat depending on the quality and grade of the gemstone.

Before promoting these minerals and going to the global market, the Ministry had to conduct a geological survey to discover the national reserve of the minerals and conduct laboratory tests to demonstrate the nature of the minerals, according to Merga Kenna, director of the Ethiopian Extractive Industry Transparency Initiative (EEITI).

“They had to address first what these commodities are, their grades and quality,” said Merga. “At this stage, the Ministry has no transparency concerning figures and facts over these particular minerals.”

By Anthony Wesaka

Kampala — The High Court has summoned Bank of Uganda to defend itself against the new suit brought against it by property mogul Sudhir Ruparelia.

In the parallel suit Ruparelia filed against Bank of Uganda last Thursday, he accuses the central bank of breaching the Confidential Settlement and Release Agreement between the two parties.

In the summons, the court’s deputy registrar gave BoU 15 days to submit its defence against Ruparelia accusations.

“Whereas a counterclaimant (Mr Ruparelia) has instituted a suit against you upon the claim, particulars of which are set out in the copy of the counterclaim. You are required to file a defence in the court within 15 days from the date of service of summons on you in the manner prescribed under civil procedure rules,” the court summons read in part.

This newspaper understands that BoU was served the summons last Thursday, the same day Mr Ruparelia filed his counter-suit.

Terms and conditions

According to the Confidential Settlement and Release Agreement signed between Bank of Uganda and Ruparelia in March this year, both parties agreed that if the terms and conditions of pact were fulfilled, all impending civil or criminal proceedings and investigations or prosecution or any other administrative action against Mr Ruparelia or related parties would cease.

“This Confidential Settlement and Release Agreement is in full, complete and final settlement of all the claims that either party may have against the other and each of the BoU and CBL hereby fully and finally releases and forever discharges and shall refrain from instituting, directing, procuring, instigating or maintain all any actions, claims, sanctions (whether administrative, civil or criminal in nature),” the confidential agreement states.

It was also agreed that no party would sue the other, commence, voluntarily aid in any way or instigate prosecution against the other. It was agreed that the Directorate of Public Prosecutions (DPP) and the Attorney General would be bound by the confidential settlement agreement, not to take any action against Ruparelia.

However, last month BoU sued Ruparelia in the High Court seeking to recover from him about Shs400b he allegedly fraudulently took out of his former Crane Bank, now liquidated, clandestinely selling the bank’s shares to himself and fleecing the bank in false transactions and vouchers.

The central bank has also since written to the DPP to consider instituting criminal proceedings against Mr Ruparelia.

Mr Ruparelia says BoU’s actions as cited above constitute breach of the Confidential Settlement and Release Agreement.

In the parallel suit against BoU, he is seeking $8m about (about Shs28b) for alleged breach of the agreement.

Clause 12 of the Confidential Settlement and Release Agreement states that without prejudice to the immediately foregoing, should any legal or administrative proceedings of any kind ensue against Mr Ruparelia as defined in the agreement, the agreement stands violated and BoU shall immediately return to him the value of the settlement consideration in immediately available funds.

In the counter-suit, Mr Ruparelia also wants BoU to surrender certificates of title and release of mortgage for prime land/property on plot 18 M418 Nakawa Industrial Area and Plot 7 Parliament Avenue.

Details of the agreement

Further details of the confidential agreement signed between BoU and Ruparelia in March, show that the businessman had sought to repossess his Crane Bank upon clearing his debts with the central bank.

However, under the agreement, BoU insisted that if Crane Bank, now liquidated, was to be returned to Mr Ruparelia, it would not be licensed to conduct financial business within the provisions of the Financial Institutions Act (FIA).

“BoU shall upon of all the consideration from SR (Sudhir Ruparelia) set out in this agreement lift the state of receivership from CBL (Crane Bank Ltd) and shall return to SR or his nominees the ownership and control of the legal entity CBL… although expressly understood by all parties that the legal entity CBL shall not be licensed to conduct financial institution business within the meaning of FIA,”,” the confidential agreement reads in part.

It was also agreed that Mr Ruparelia was to change the Crane Bank name and completely remove the word “bank” in the new name.

“As first order of business, change its name to remove the word Bank or any derivative as well as amend its memorandum and articles of association to remove all reference to Financial Institutions Business in the objects or elsewhere,” BoU further demanded under the agreement.

However, Mr Ruparelia’s repossession of Crane Bank was contingent on him paying $8m (about Shs28b) to BoU within 30 days from the date of the agreement on March 20.

He was further required to pay BoU $10m(Shs 36.09b) within 90 days from the date of the agreement. The balance of $ 42m (Shs151.6b)would be paid by way of transfer to BoU of real property of equivalent market value.

The market value of the real property was to be reached by a joint valuation of the two parties who would appoint one valuer each within seven days from the date of execution of the agreement.

Mr Ruparelia was to identify and supply a list of properties which were free of encumbrances and whose collective value would match the required money under the confidential agreement and the properties were to be submitted to BoU at the date of execution.

The list of properties picked out by Mr Ruparelia would then be subjected to the joint valuation process to determine the agreed value of the assets.

It was further suggested that in case of a disagreement on the joint valuation of the properties, the matter would be referred to a mutually acceptable third party valuer.

“Immediately upon receiving the list of settlement titles from the joint valuation team, SR (Sudhir Ruparelia) shall hand over the duplicate certificates of titles and the dully sealed/executed and witness transfer deeds in respect thereof to BoU and BoU shall be at liberty to place the same on market for the sale to recover the balance outstanding on the settlement consideration,” BoU and Ruparelia agreed.

By Philip Wafula

Over 400 workers of Rift Valley Railways Uganda (RVRU), a consortium established in 2006 to manage the parastatal railways of Kenya and Uganda, have gone on strike citing non-payment of June and July salaries.

The strike that started on July 26 has since paralysed commuter freight and passenger rail services, left locomotives across the five stations of Kampala, Jinja, Iganga, Busembatia and Tororo grounded, and a trail of losses among the business community in its wake.

Admittedly, passengers who usually use the Kampala-Namanve train as a cheap alternative transport are stranded, while companies such as Roofings, Bidco Uganda Limited, Inter Freight, oil companies among other transporters, are counting losses.

Some businessmen on Thursday told Daily Monitor that with the Kenyan general elections on the horizon, they want the Nairobi-based RVRU to refund their money since their goods have not been delivered, reckoning that their goods are ‘safer’ if they cross the borders before the elections.

According to Mr Victor Byemaro, the General Secretary of the Uganda Railways Workers’ Union, workers laid down their tools after going for two months without pay. They also want management to clarify on the issue of the Provident Fund. Provident fund is a form of social safety net into which workers must contribute a portion of their salaries and employers must contribute on behalf of their workers.

However, Mr Isaiah Okoth, the RVR Group Chief Executive Officer on Thursday said that Ugandan workers have simply ‘boycotted’ work.

He said: “Because the unions have stated that they did not call a strike and RVR management wasn’t notified as per labour laws, our position is that Uganda workers are not on strike but have boycotted work since June 26.”

According to Mr Okoth the delay in remitting June & July salaries was as a result of various RVRU supplier court orders that required RVR to make additional payments that had not been budgeted. This, he said, was further worsened by the poor cash collection by the RVRU team.

“This model worked well until May 2017 when we received a letter from RVRU lawyers demanding the payment of all outstanding Provident Fund payments. We thereupon informed all RVRU staff members that payment of all outstanding Provident Fund payments would delay the June salary payments,” he said.

He said: “After receiving approval from RVRU staff that we should prioritise outstanding Provident Fund payment over June salaries, payment of outstanding Provident Fund payment was effected with the agreement that RVRU commercial team would expedite the collection of outstanding receivables of over US$200,000 from Uganda clients to ensure payment of June salaries before end of July.”

He said that on June July 26 and without warning or having collected outstanding payment from Uganda clients as agreed, RVRU management informed the Executive Committee that the entire RVRU staff was on strike demanding salary payment for both June and July – which hadn’t ended.

While Mr Byemaro is adamant that they will only call off their strike once their grievances have been ‘satisfactorily met’, Mr Okoth thinks otherwise.

“Since RVRU team hasn’t been able to collect outstanding payments from Uganda clients, we have had to redirect cash from other activities to ensure that RVRU employees receive at least one month salary. We are hopping RVRU team will get back to work at the earliest opportunity, deliver goods to our key clients quickly, collect additional cash and thus enable us to process July salary payments,” Mr Okoth said.

In 2007, a 25-year concession was signed between RVR, previously Uganda Railways Corporation (URC), and the government of Kenya regarding the management of the over 2,000-kilometre track from Mombasa to Kampala.

Since then, however, RVRU workers and management have endured toxic hostilities.

In 2011, their workers went on a sit-down strike demanding a salary increment and payment of their salary arrears dating back to five years.

In 2012, more than 700 workers began a sit down strike following threats by management to lay off 200 employees allegedly without following terms agreed upon with the Uganda Railway Workers Union Members collective bargaining agreement.

In 2016, over 500 employees went on a sit-down strike citing unfair treatment and arbitrary dismissal of workers.

PRESS RELEASE

Government has deployed a task force of 400 security personnel to carry out an operation to put an end to all forms of illegal mining activities, popularly known as ‘galamsey’ in the country.

The operation dubbed: ‘Operation Vanguard’ is a presidential initiative which forms part of efforts by government to safeguard the environment and water bodies, and to protect life and properties from the activities of illegal miners.

It is made up of well-trained, experienced and highly motivated personnel drawn from the Ghana Armed Forces, Ghana Navy, Ghana Air force and Ghana Police Service.

The initial deployment of personnel will operate in the three most-affected regions of the country namely, Ashanti, Eastern and the Western regions and stay in the illegal mining communities until the degraded lands are restored, and illegal mining activities totally eradicated.

Speaking at the launch of the initiative in Accra, the Defence Minister, Mr Dominic Nitiwul, warned that any attempt to resist efforts of the task force in the fight against galamsey would be met with strong resistance.

He cautioned people daring the task force refrain from such an act because the whole nation was behind them.

“Don’t dare them, it will not be in your interest to dare them”, the Defense Minister emphasized.

The Minister for the Interior, Mr. Ambrose Derry; encouraged the taskforce to fight with courage and fortitude and exhibit the highest degree of professionalism with a clear conscience.

“We cannot fail in this operation, failure is not an option, we shall put an end to all forms of illegal mining activities”, Mr. Derry stated.

On his part, the Inspector General of Police, David Asante-Apeatu assured members of the communities where the operation would be undertaken that the taskforce would not intimidate them, because their target was the illegal miners and that they should go about their normal duties.

The Chief of Defense Staff, Lt. General Obed Boamah Acquah, said the taskforce had been provided with additional logistics like vehicles, clothing and equipment to facilitate effective operation.

Lt. General Acquah noted that ‘Operation Vanguard’ was different because officers had undergone an intensive pre-deployment training and were combat-ready and sure of success.

Source: ISD (Doris Sodjah)

By Lovemore Zigara

The Environmental Management Agency (EMA) says it has started monitoring stocks of polystyrene material (kaylites) on manufacturers and distributors to ensure that the ban on the product is adhered to.

Government banned the use of kaylite last month but gave manufacturers of the product, a three-month reprieve to clear their stocks while advising members of the public to use them at their discretion.

EMA provincial manager for Midlands, Mr Milton Muusha, told Business Chronicle that the agency wants to ensure that there is no further production of the material and that the existing stocks would have run out by October when the ban of kaylite takes effect.

“What we have done now is to issue an order to every player who is using kaylite in the province and we are monitoring the compliance for the three months that we have given them. For manufacturers what we are doing is that we have taken stock of what they have and we expect that stock to be decreasing as we go towards the deadline,” he said.

“We are carrying out frequent inspection audits to find out if they are complying with the order in preparation for the eventual phase out of the kaylite material.”

Government banned the use of kaylite and related plastic packaging material last month citing health hazards and pollution. Experts say exposure to chemicals emitted by heated kaylite causes headaches, weakness, respiratory tract, gastrointestinal and minor kidney effects.

It also decreases concentration abilities and may cause irritation of the mucous membrane and affect the eyes, nose and throat. Studies have shown that increased styrene exposure leads to chromosomal damage, abnormal pulmonary function and cancer.

With emphasis on re-using and recycling of materials, polystyrene cannot be recycled, while its non-biodegradable nature means it is ingested by aquatic animals that humans later consume.

In a statement announcing the ban of kaylite EMA board chair Ambassador Zenzo Nsimbi said: “The Environmental Management Agency has with immediate effect activated Statutory Instrument 84 of 2012 (Plastic Packaging and Plastic Bottles) (Amendment) Regulations, 2012 (No 1.), which prohibits the manufacture or importation of expanded polystyrene (kaylite) for use or commercial distribution within Zimbabwe”.

The ban follows a call by Environment, Water and Climate Minister Oppah Muchinguri to heavily punish councils, companies and individuals that pollute the environment.

By Olushola Bello

Lagos — Dangote Cement Plc traded 417.76 million shares yesterday as the Nigerian stock market rebounded with a gain of 2.43 per cent. According to Reuter, Dangote Industries Limited has sold a 2.3 percent stake in Dangote Cement to foreign buyers in a stock market deal valued at N86.1 billion ($236 million).

A total of 416 million shares of Dangote Cement traded at N210 in six off-market deals negotiated between Stanbic IBTC and Meristem stockbrokers as this resulted in the huge amount seen in the value of market transactions.

Meanwhile, the All Share Index (ASI) gained 872.87 absolute points, representing a gain of 2.43 per cent to close at 36,720.62 points. Similarly, the market capitalisation gained N302 billion, to close at N12.656 trillion. The upturn was impacted by gains recorded in medium and large capitalised stocks, amongst which are; Dangote Cement, Nestle, Guinness, PZ Industries and Stanbic IBTC.

Market breadth was positive with 32 gainers and 22 losers. Ashaka Cement recorded the highest price gain of 10.09 per cent, to close at N12.77 per share. May and Baker followed with a gain of 9.86 per cent to close at N3.12, while Honeywell Flour appreciated by 9.60 per cent to close at N2.17 per share.

Sterling Bank went up by 9.43 per cent to close at N1.16 and PZ Industries rose by 9.34 per cent to close at N24 per share. On the other hand, International breweries led the losers’ chart by 9.63 per cent, to close at N29.45 per share. UACN followed with a decline of 5.84 per cent to close at N17.40, while Aiico Insurance declined by 5.36 per cent to close at 53 kobo per share.