The government will no longer be going ahead with its initial plan for the possible liquidation or placement under judicial management of beleaguered state roads contractor, Roads Contractor Company (RCC).
With RCC financial woes again coming to the fore, the latest being its failure to pay N$6.1 million in rent for its former building, which it now rents from the Namibia Post and Telecommunications Holdings, Public Enterprises Minister, Leon Jooste, told the Windhoek Observer on Monday that government will no longer be taking the liquidation route.
“The Ministry of Public Enterprises is not pursuing the liquidation or judicial management of the RCC but rather attempting to rescue the company in an appropriate manner,” Jooste said, adding that the previous Cabinet decision to place the RCC under judicial management will not be implemented.
“We have requested then to prepare a feasible business plan as a matter of urgency and we will be submitting that to Cabinet via the relevant committee for approval. In the meantime, we have also submitted a request for budgetary provision to remunerate the employees in the interim.”
The Minister’s statement over RCC appear to be a change of heart from Government’s earlier firm stance against the continual bailout of struggling SOEs , which eventually led to the voluntary liquidation of Air Namibia, which government stated it could no longer continually bail out.
“This is not currently a bailout, there is an existing Cabinet decision stating that salaries must be paid,” Jooste said.
According to the minister, “Our mandate is to restructure and reform public enterprises and these interventions can take many forms. Our conviction is to always act in the best interest of the public at large and we will not deviate from that position.”
“We will always do everything within our powers to save a public enterprise but our ability to implement such interventions will obviously depend on Treasury’s ability to fund these interventions.”
Jooste’s stance, has emerged to be in direct contrast with that of Works and Transport Minister, John Mutorwa, who told the Windhoek Observer that his ministry was pursuing a possible judicial management for RCC, but the company was in 2020 removed from his portfolio.
“As soon as we received the AG’s legal advice, we approached Cabinet, deliberated and took resolutions. Last year after we made our submission to Cabinet, the Public Enterprise Governance Act of 2019 came into operation.”
This comes after government’s initial attempt to close the company in 2019 was blocked by an RCC Act, which in Section 12 states that “the Company shall not be wound up or placed under judicial management except under the authority of an Act of Parliament.”
Then Attorney General, Albert Kawana, in 2019 advised Mutorwa, to have a bill passed in the National Assembly for the company to be placed under judicial management.
Several attempts by Government to save RCC by merging it into other SOEs in its industry ended in failure, with the Roads Authority (RA) in 2019 turning down a proposed merger, arguing that the move would not be beneficial.
The state-owned enterprises’ financial woes over the years led in 2018 to the company loosing its headquarters to NPTH in a bid to save it from possible seizure for debts owed to Bank Windhoek.
RCC’s liabilities in 2019 stood at N$910 million.