LOBAMBA – The Eswatini Civil Aviation Authority (ESWACAA) has defended its financial position despite recording an accumulated deficit of more than E1.7 billion, insisting the losses stem mainly from depreciation of high-value airport infrastructure rather than poor financial management.
Chief Finance Officer Gugu Mdluli made the remarks before Parliament's Public Accounts Committee (PAC) as the authority responded to issues raised in Auditor General Timothy Matsebula's Compliance Audit Report for the financial year ended March 31, 2024.
According to the audit report, ESWACAA had accumulated losses of E1.712 billion by March 31, 2024, leaving the organisation with negative equity after exhausting government's shareholder investment.
The auditor general warned that government might ultimately have to inject additional funds to sustain the authority, noting that recurring deficits were driven largely by high operating costs.
Mdluli said the financial position had to be understood in the context of the assets transferred to ESWACAA when it assumed responsibility for King Mswati III International Airport.
"It is true that there are accumulated losses, but it is important to explain how we got here. Government transferred the airport's assets to us and, because these are high-value assets, they depreciate over time. The losses are therefore not because we are spending excessively."
PAC Chairperson Madala Mhlanga asked whether the authority's financial position had reached crisis level.
"It has not reached that stage. We are managing the assets and looking at interventions to ensure they do not push us to that point. These assets are expensive and will eventually require replacement, which will need government intervention," Mdluli replied.
Phondo MP Bonginkosi Dube questioned what he saw as a contradiction between the auditor general's findings and the CFO's assurance that the situation was improving, saying the latest financial statements still reflected substantial losses.
Committee members also sought clarification on which assets were contributing most to the depreciation.
Mdluli explained that ESWACAA's largest assets included airport buildings, runways, air navigation systems and other infrastructure, with the airport buildings alone valued at about E2.4 billion.
She said annual depreciation of these assets continued to weigh heavily on the authority's financial statements, while a significant portion of government funding was spent on maintaining critical infrastructure.
The CFO also highlighted the high cost of specialised aviation training, noting that training a single air traffic controller could cost around E2 million because of the technical expertise required to maintain aviation safety standards.
The committee also questioned ESWACAA's plans to improve aircraft refuelling infrastructure at King Mswati III International Airport.
Director General Andile Mthethwa explained that although a fuel farm had been constructed when the airport was built, no underground pipeline system was installed to connect it directly to aircraft parking bays.
"Most modern airports have such infrastructure. At the moment we are prioritising projects that will maximise the utilisation of the airport's existing assets. Once those projects are completed, we will address the fuel farm."
He said installing underground pipelines would require substantial capital investment and major alterations to the airport apron. As an interim measure, ESWACAA had acquired two fuel bowsers to improve refuelling efficiency while planning a permanent solution.
Mthethwa added that another long-term option would be constructing a new fuel farm closer to the aircraft stands to simplify future pipeline installation.
ESWACAA Director General Andile Mthethwa responds to some of the queries.