RCC attempts a comeback
The leadership of the parastatal admits that the company is going through a turbulent phase but has expressed confidence that it will grow into a significant contributor to the country''s economy.
29 November 2016 | Infrastructure
“As a public enterprise we need to and have to show our corporate responsibility and accountability to our shareholders, be it our employees, customers, our shareholder [government], our financiers, the public at large,” says board chairman Fritz Jacobs.
He says the RCC is not supposed to be a burden to the shareholder but rather a profitable, sustainable, responsible and dividend-paying national contractor.
To date, the RCC has not been a position to pay over any dividends to the government and its last finalised audited financial report was for the 2012/13 financial year.
The new board and management have, however, prepared audit reports for the subsequent years over the last 12 months, Jacobs says.
In the past year the RCC has put in place and developed a number of initiatives, plans, and implemented and pursued several strategic efforts.
These included putting in place board governance structures, finalising a five-year strategic business plan and restructuring the organisation to address its mandate.
The restructuring, however, is not the turnaround strategy that the former acting general manager, Pieter Oosthuizen, had put in place, but an attempt to start afresh, Jacobs says.
“We look at everything afresh because we cannot allow the process that has been in place in the past to just be adjusted because for 15 years they have not produced anything. We have to get our house in order.”
He says the RCC is in the process of modernising its plant equipment and fleet after a recent auction of old and obsolete equipment.
The parastatal intends to improve and diversify its revenue base.
But it faces real historical challenges, which affect its financial situation and which meant that over the last five months it was under severe pressure to pay salaries and creditors.
Notwithstanding its difficulties, the RCC has announced that it intends to bolster its financial position from a net liability of about N$256 million to a net asset base of N$900 million over the next three to five years.
It is therefore requesting a one-off investment of N$300 million by the government.
“This is not the only possible option for RCC, if all possible options of turnaround and transformation can be considered. However, time is of the utmost essence and shareholder appreciation of the historic challenges we face is important,” Jacobs says.
He says the RCC is an operating company which generates revenue and that can continue to grow its revenue from operations on a sustainable and commercial basis without continued bailing out by the government. The RCC is therefore setting its sights on becoming a bigger player in the road, infrastructure and housing development sectors.
Jacobs says the company has realigned itself over the last 12 months to improve its prospects of doing business. It is participating in projects valued from N$750 million to about N$2.6 billion. Of the N$2.6 billion worth of bids submitted, about N$800 million has been awarded.
This, says Jacobs, means that the RCC is starting to establish a positive trend in its revenue pattern.
If things turn for the better for the beleaguered company, it intends to recruit additional engineers, as well as commercial and other technical staff.
Jacobs says while it is true that the company is going through a turbulent phase, the board and management are confident it will grow into a significant and positive company.