Jooste, Mutorwa in RCC bun fight

The ministry of works and transport, under newly appointed minister John Mutorwa, is of the view that the Roads Contractor Company's operations can be revived and that there is no need to place the beleaguered state-owned enterprise under judicial management.

Minister of public enterprises Leon Jooste last year announced that the RCC would be placed under judicial management as a means to try and revive its operations.

Under judicial management, a moratorium is placed on debt payments and a manager is appointed to oversee the business.

The judicial manager proactively seeks ways to restructure the company's debt and respond to the financial demands on the company.

Providing an update on the matter, ministry of works spokesperson Julius Ngwedha said: “Cabinet has authorised the RCC to seek solutions so that it can get out of its current situation. The RCC has also been requested to look for funding so that the entity can be run without government support.”



According to him, the RCC's role was important, while job losses would not be desirable in the current state of the economy.



“The ministry has acknowledged that the RCC is vital in terms of the stimulation of the economy,” he said.



Ngwedha added that Mutorwa had visited several SOEs and that discussions held with the RCC board and management had been generally positive.



“Since the arrival of the new transport minister he has taken familiarisation visits to state-owned enterprises and the RCC was one of them and he had good discussions with the board and the management,” said Ngwedha.



“If other construction firms are making money, one wonders why the RCC cannot make profit. The RCC is a strategic state-owned enterprise; it has to be returned to full operations.”



According to him, the issue of judicial management was now under review, adding that the RCC had secured funding from commercial banks.



“The judicial management process is under review, the judicial management matter must be relooked at. The RCC has got funds to support itself,” he said.



With the tabling of the national budget, the RCC was allocated N$21 million for its operations for a three-month period. The RCC's wage bill is N$7 million a month.



Ministry of public enterprises spokesperson Jonathan Swartz told the media last week that there was no going back on the decision to place the RCC under judicial management.



“The decision to approach the High Court to place the RCC under judicial management was a cabinet decision and can only change if the decision is rescinded by cabinet. This has not happened, and the decision still stands,” he said.



As the RCC's line minister, Mutorwa will have to table a bill to place the RCC under judicial management, the public enterprises ministry has repeatedly stressed.



Jooste initiated the process in September 2017 because of the company's inability to make profit and always requiring bailouts.



If approved, the current RCC board would be disempowered.



The duration of the period of judicial management, if approved, could not be predicted, Jooste said.



Jooste also said that the 393 RCC employees would not be affected if the company was placed under judicial management, because the move would try to prevent the company from closing down.



“The RCC has many creditors who will, while the company is under judicial management, have to wait to see their claims against the company settled. The judicial manager will proactively seek ways to restructure the debt of the company and respond to the financial demands of the company,” Jooste said.



Furthermore, Jooste said that the judicial manager, if appointed, would be empowered to make far-reaching decisions on the company's business transactions, covering all aspects of operations, human resources and financial management.



He said the decision to appoint a judicial manager was the “formal final decision from stakeholders” and if the current board wanted to protest the move, it would be replaced.

OGONE TLHAGE