RCC business plan feasible - !Naruseb
The transport minister believes that judicial management is not necessary to rescue the Roads Contractor Company.
12 September 2017 | Government
!Naruseb's comments were in stark contrast to issues raised by public enterprises minister Leon Jooste, who announced last week that the RCC may be placed under judicial management, a development that might make its board and executive management team powerless while a manager appointed by the High Court attends to the RCC's affairs.
!Naruseb yesterday said if the RCC's business plan was implemented, it would be back on its feet within three years.
“The five-year business plan which was compiled and submitted to our ministry is economically feasible. The transformation of the RCC will definitely take time, it will take about three to five years… if it happens sooner, that will even be better,” !Naruseb said.
According to him, the board would be faced with various challenges and would have to make tough decisions during this significant period.
“The board and stakeholders should engage the RCC accordingly and in support of the CCOPP decision to turn around the company,” !Naruseb said.
Jooste announced that a cabinet committee had resolved to place the RCC under judicial management.
Parliament will debate the proposal, and if it is accepted, an application will be lodged with the High Court to place the RCC under judicial management.
Judicial management is a temporary court-supervised rescue plan. Its objective is to give viable companies which are in financial trouble a more even chance to rehabilitate and be restored to profitability.
Jooste had previously said judicial management was the best option for the RCC.
“We are convinced that as we looked at all the options for the RCC, our collective decision is that this is the preferred option for the RCC,” Jooste said.
During that time, the shareholder (the government) and the board will have no power over the parastatal.
“If the board were to decide to oppose this decision, the shareholder will have no other choice but to dissolve it and replace it with an interim one,” Jooste said.
He said the current and former boards had been part of the entire process.
At the end of the process the judicial manager will recommend whether the company should be wound up or whether there is a chance to salvage it. In the end the shareholder will have to decide the fate of the company.