Hertta-Maria Amutenja
The Ministry of Finance and Public Enterprises yesterday revealed that government is considering the liquidation of the financially struggling parastatal, Roads Contractor Company (RCC).
The parastatal, which has a monthly wage bill of just over N$ 3 million, and long term- loans worth just less than N$ 8 million, has been in operation despite having an impaired profit.
“The Government is busy consulting through the development of the plan. Once that has been completed, it will inform the decision on what the Government will do with the company,” Wilson Shikoto, the Ministry’s Spokesperson said.
However, Shikoto adds that since the temporary board’s appointment, it has been able to engage in preliminary discussions with RCC regarding the government’s future plans.
“The shareholder ministry has appointed an Interim Board. Its primary focus is to look at the operations of the organisation and design a strategy with a view to turn the company around. As a result the Board has also conducted the first phase of consultations with the relevant stakeholders and received comments on the plan. It will thereafter present the plan to the shareholder for consideration or approval. In short, the plan currently under consideration will then inform the recommendations to the shareholder on the long term plan of RCC. We will engage with the media in the coming months on the future of RCC,” says Shikoto.
In 2021 the government said it was no longer going ahead with its initial plan for the possible liquidation or placement under judicial management of the RCC.
The same year the company was evicted from its place of business after failing to pay N$6.1 million in rent for its former building, which it now rents from the Namibia Post and Telecommunications Holdings. The company’s head office at the time was used as collateral for a loan the company took from Bank Windhoek, got attached by the bank in 2018, but NPTH stepped in, paying N$190 million to rescue the property and prevent it from being repossessed.The building was then rented back to the RCC, which has allegedly failed to make a single rental payment.
Two years prior to that the government attempted to close the company. However, it was blocked by the RCC Act, of which 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”.
Shikoto says with money generated through RCC’s normal operations of project execution, the road contractor has been able to service the loans it has through debt repayment plans with various creditors.
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 to them.
