Justicia Shipena
Government says it remains confident that the Roads Contractor Company (RCC) can recover and become a strong national asset within the next three to five years.
Works and transport minister Veikko Nekundi said this in Parliament on Thursday while responding to questions from Independence Patriots for Change (IPC) member of parliament Nelson Kalangula on RCC’s operational mandate and financial health.
Nekundi said the government has reviewed the company’s turnaround strategy and believes the plan can work.
“The government is still confident that there is hope to turn around the company within the next three to five years. It is the intention of the government to support the plan by allocating projects to RCC for it to execute and generate revenue for its continued existence,” he said.
The assurance comes after years of financial and operational strain at the state-owned contractor.
In 2018, RCC’s head office was attached by Bank Windhoek after the company used it as collateral for a loan.
Namibia Post and Telecommunications Holdings later paid N$190 million to prevent the property from being repossessed. The building was rented back to RCC. In 2021, the company was evicted from its premises after failing to pay N$6.1 million in rent.
Three years ago, the Ministry of Works and Transport awarded two construction projects to RCC in an attempt to ease its financial pressure. At one point, the government considered liquidating the company or placing it under judicial management.
In 2023, the Ministry of Finance and Public Enterprises said liquidation was under consideration.
At the time, RCC had a monthly wage bill of just over N$3 million and long-term loans of just under N$8 million. The company continued operating despite impaired profits.
Between 2016 and 2024, some of RCC’s production assets were auctioned. This left the company without enough heavy equipment to carry out large road construction projects. As a result, it relied on joint partnership agreements and subcontracted much of its work.
Nekundi told Parliament that RCC is now operational and active on several capital road projects and maintenance contracts.
To rebuild capacity, the board and management introduced a recapitalisation plan based on a lease-to-own model. The plan focuses on acquiring new equipment.
According to Nekundi, RCC has received two bulldozers, four excavators, eight graders, four loaders, nine tipper trucks, two vibro rollers, three water trucks, nine light delivery vehicles and eight accommodation or office containers.
“Delivery of this critical equipment will continue in line with factory productions,” he said.
He said RCC can pay its operational costs from contract revenue but needs more projects to remain sustainable.
Kalangula questioned why the government continues to allocate N$55.9 million annually to RCC despite past governance concerns.
In response, Nekundi defended the allocation and urged lawmakers to focus on reform.
“Honourable member, prepare your mind to erase the historical bad site of RCC; we are focused and determined to transform the company with strategic and tactical steps, step by step, albeit with the speediest motion,” he said.
On claims that the company is not visible on the ground, Nekundi said the allegation is not based on facts.
“The company is active on all five Bitumen Maintenance Unit (BMU) contracts we awarded to them, as well as on all five capital road projects,” he said.
RCC has 331 employees, although the number is not fixed.
Nekundi also rejected claims that RCC has been sidelined in favour of foreign state-owned companies.
“I wish to respond to this misleading and unverified allegation with the attached projects allocated to RCC,” he said.
He said the government wants RCC to become “the country’s national asset delivering competent service delivery and enhancing human capacity.”
He added that RCC has contracted and subcontracted small and medium enterprises and currently procures services and products from 395 vendors.
