Govt spends N$100m on idle RCC employees

09 November 2018 Author   Kaula Nhongo

Government has spent close to N$100 million for the past 13 months on Roads Contractor Company’s (RCC) employees who remain idle while management looks for ways in which the company can become fully operational.

RCC, which employs 393 people, is said to have salary bill of N$7 million per month, according to figures provided by Public Enterprises Minister, Leon Jooste, last year. 
He said at the time that government was not comfortable with sending 393 people on the streets immediately.
An employee who spoke to the Windhoek Observer on condition of anonymity said workers have been coming to the office for the past year just to browse the internet as the company does not have projects to work on. 
“We just come and sit and surf the internet. Even that has become very boring because one can only browse for so long. People are frustrated, this has become very monotonous,” the employee said.
There are suspicions that some of the workers have been working on side jobs while still receiving salaries from RCC.  
The roads SOE last produced its financial statements in 2008 contrary to the law requiring financial reports to be tabled annually in Parliament.
The available reports indicate that the RCC has made loses since 2000 when it was established and currently, the value of its liabilities exceeds the value of its assets
Public Enterprises Minister, Leon Jooste, said last year that the parastatal needed about N$1.1 billion to stay afloat.
Ministry of Works and Transport Public Relations Officer, Julius Ngweda, said consultations on the Judiciary Management Bill were still ongoing and were likely to be carried over to next year. 
RCC was placed under judicial management in September last year due to its inability to make a profit and its repeated reliance on government bailouts. 
The RCC Act requires parliamentary endorsement of the Cabinet’s decision to place RCC under judicial management or liquidation.
RCC is said to have many creditors who will have to wait for their claims against the company to be settled.  Judicial management will stave off legal action that could further jeopardize the assets of the company.
“Interim Roads Contractors Company board is hard at work trying to revive the company. At present, the interim board and management are busy working on the turnaround strategy, as per the Cabinet Committee on Overall Priorities’ decision. 
“The ministry (works) is currently assisting with salary payments while the company is in the process of redefining its turnaround strategy towards self-sustainability,” Ngweda said.
RCC's financial woes have been in the public domain for years with reports of unpaid debts as well as bank overdrafts which at one point almost resulted in the company’s head office being auctioned off.
Finance Minister, Calle Schlettwein, pushed for RCC’s closure last year because of its poor performance and inability to fully execute its mandate.
Ex-Attorney General, Sackeus Shanghala, also wrote a legal opinion last year which apparently favoured closing the entity.
Shanghala submitted the opinion, dated 27 July 2017, to the Cabinet Committee on Overall Priorities - a day after the president met the committee to discuss the RCC's fate.
"The RCC is needed. What is not needed is a full-blown government road construction company, tendering side-by-side with local firms as well as foreign firms for large road and civil construction projects," Shanghala wrote.
New Era reported in May last year that the Office of the President was opposed to the closing of RCC and requested Jooste to look at ways of bailing out the parastatal.
Then Minister of Works and Transport, Alpheus !Naruseb was said to be one of the ministers who was against RCC’s closure.
According to reports, the state of the company is attributed to historic poor management practices while government has also been blamed for instructing that RCC permanently employs a number of ex-combatants, despite the fact that it is a construction and technical company which only requires a few staff members on its establishment.


The Windhoek Observer is an English-language weekly newspaper, published in Namibia by Paragon Investment Holding. It is the country's oldest and largest circulating weekly.

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