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Sunday 20 January 2019
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RCC future: To recapitalise or liquidate?

Government has set afoot plans to either liquidate or recapitalise the troubled Roads Contractor Company (RCC), while merging RCC, Roads Authority (RA) and Road Fund Administration (RFA) is also an option, The Patriot can reveal.
This comes in the midst of recent revelations that the parastatal needs about N$1.1 billion to stay afloat.
The hefty bailout request comes at a time when Government is also facing its own liquidity challenges which culminated in government approaching the African Development Bank (AfDB) for a N$10 billion loan to finance the budget deficit and some operations.
This newspaper can confirm that Cabinet has since taken up deliberations on the matter following board submissions by the RCC board recently with recommendations from the State Owned Enterprise Minister, Leon Jooste that the company be absorbed into the other two companies[RFA and RA].
The initiative has also has the support from the Minister of Works and Transport Alfeus   !Naruseb. According to information at hand, !Naruseb is also questioning of the RCC’s ability to make profit after years of continued financial strife.
RCC Chief Executive Officer, Tino Hanabeb when approached this week said he has been making frantic efforts to convince the line ministry to recapitalise the company and let it continue as a separate entity, adding that he is not certain whether the state is entertaining the move.
“As management we have made our own efforts to have the company recapitalised and also craft a business plan but whether we are recapitalised or liquidated is a shareholder decision that we do not have influence on,” he said.
According to Hanabeb the RCC have since made its own submission to the line Minister for consideration. However he could not give details of what is contained in the company’s submission.
Despite hinting that there are constant engagements with the Government, he refused to divulge more information on the nature of current engagements between the company and the line ministry.
Hinting on the issue Ministry of Works and Transport Chief Public Relations Officer Julius Ngweda last week said: “Proceedings have been put in motion by the ministry[works] through Cabinet engagement to find a long lasting solution to some of these troublesome companies under the Ministry of Works and Transport. Some of the companies that we are definitely looking for an opportunity to have it absorbed is the RCC which has been experiencing financial challenges. We will soon announce the best way forward when Cabinet makes its financial decision on the matter.”
In support of the possibility of liquidation of the RCC and the eventual absorption of some of the roles by both RA and RCC is also the Minister of Finance Calle Schlettwein who close sources says is not buying into the idea of pumping N$1.1 billion into the entity which has been struggling to stay afloat on its own in the past year.
Sources privy to the operations of the RCC say while the management of the company is keen to continue with the entity as an independent institution, it is failing to convince the shareholder how the state owned entity-which has been surviving on Government bailouts-will turn its fortunes from loss-making to profitability.
Some observers feel RCC’s operations can easily be absorbed by RA and RFA, but cautioned that a feasible plan would have to be hatched to find an amicable way of absorbing the staff that is employed by RCC into the other two parastatals.
Jooste however did not confirm nor deny the issue of a possible liquidation of the RCC saying, “Unfortunately I am unable to discuss the RCC issue as it’s currently within the Cabinet deliberations.”
Although Jooste is also staying clear of public engagement on the RCC issue, The Patriot understands that he has not made it a secret that the company[RCC] does not have a bankable business plan that has potential to neither create a self-sustainable nor profitable entity in the future.
The future of the more than 400 RCC employees is in serious jeopardy if the company is closed.
RA said it will only comment on the matter “once it is communicated to us officially by the relevant Authority.”




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