RCC in Money Trouble – Again

A UNION has accused the Road Contractors Company (RCC) of failing to remit the money deducted from workers as pension contributions and for paying 53 workers at one of its failed subsidiary for doing nothing.

Secretary general of the Namibia Building Workers Union, Victor Hamunyela, who spoke on behalf of RCC’s subsidiary firm Bricks and Concrete Industries (BCI) on Wednesday, accused the company of playing hide and seek as it gambles with the future of their workers.

The RCC has failed to run two of its business arms, one being an idle subsidiary in Zambia.

The Namibian understands that RCC has been deducting money from its workers’ salaries on behalf of pension insurance institutions such as the Government Institutions Pension Fund (GIPF) and Alexander Forbes but the money was not paid to the companies.

It is not clear how much is outstanding, but sources within the company described the situation as a disaster which the RCC is trying to cover up.

Although Gerson Karaerua, RCC’s general manager of business development, property and corporate services told The Namibian this week that they are not in arrears in remitting their mandatory deductions, he admitted delays in the last two months.

Hamunyela said members of his union are registered with Alexander Forbes but no payment has been made to the insurance firm since mid last year when the RCC subsidiary faced financial problems which resulted in its closure.

The broke BCI that initially had 100 wrokers was bought by government in September 2005 to produce and supply concrete products such as bricks, pavers and ready mix concrete.

Some of the workers from BCI were integrated into RCC structures, others were retired and only 53 remained but were sent home on full pay when the company went bust.

“Their pay slips show that pension contributions are being deducted, but Alexander Forbes claim they have not received the money. We have not even received union membership subscriptions since May last year.

“The main implication is that workers do not know whether they will receive their pensions when they retire. Some are old and close to retirement,” Hamunyela said, adding that he will meet administrators at their line ministry next week to report their concerns.

Hamunyela also said people are getting salaries without doing any work.

“They are just sitting at home because BCI is closed. The situation shows that the custodian of the body [ministry of works] seems to be folding their hands and watching a disaster unfolding,” he said.

It is not clear how many RCC workers have been affected by the pension saga but their annual financial report of 2010 to 2011- which is the last report – shows that they employed about 900 people, costing them N$90 million per financial year.

Even though RCC admitted that there was a problem of non-payment to insurance companies and other service providers, the parastatal brushed aside suggestions that the problems of not remitting deductions has been ongoing for years.

“However, during the last two months, the payments were done after due dates. As a consequence of this, some service providers started charging the individual employees interest on arrears,” Karaerua said.

According to Karaerua, RCC is taking care of the situation by consulting the stakeholders and that staff members will not be affected as they have been informed through the union.

RCC injected N$24,5 million for investments and an extra N$22,6 million for BCI’s provision for debts in 2008. RCC later blamed its poor performance on bailing out the now bankrupt BCI.

RCC refused to comment on issues regarding their subsidiary company BCI even though they are responsible for paying the salaries for workers who are not doing any work.

“RCC is not mandated to handle any query on behalf of BCI,” Karaerua said.

Efforts to get comment from BCI were not successful.

A source at GIPF said they had received contributions from RCC but they are not sure whether the money is the full amount due as the official responsible for the reconciliation was on leave.

A report shows that RCC owns about 230 earth moving and construction units of equipment as well as a small plant to execute its revenue projects.

The Namibian is also informed that RCC has lost several machines at several sites as a result of theft but RCC said they are a responsible organisation whose assets are always protected.

BCI is not the only bankrupt subsidiary of RCC, after its Zambian branch.

According to media reports, Cabinet resolved two years ago that N$18 million should be disbursed to RCC Zambia to honour outstanding creditors.

“Right now Zambia is not operating. The only people who are employed there are two security guards and one administration employee who are looking after our assets,” Karaerua said, rubbishing claims that RCC is also paying top officials there.

The 2011 RCC report also showed that the company owed N$160 million in tax, a situation which they said was historical and was realised prior to the beginning of the turnaround tax repayment compliance which started around September 2008.

Source : The Namibian