MEC Wessels Morweng addressing the media about North West Transport Investment NTI issues and non payment of staff
MEC WESSELS MORWENG MEDIA BRIEFING ON NON-PAYMENT OF NTI EMPLOYEES’ SALARIES BY THE BUSINESS RESCUE PRACTITIONER, BRP
M0NDAY 06 JANUARY 2025
MEC BOARDROOM, TIRELO BUILDING – MMABATHO
The Head of the Department, Dr Hans Kekana
Senior Managers of the Department
Members of the Media
Compliments of the Season and welcome to this first media briefing of 2025
The challenges facing the North West Transport Investment (NTI) are not and have not been ignored by the Department of Community Safety and Transport Management. The entity’s challenges though going back for several years, had been compounded and exacerbated by the Business Rescue Practitioner, BRP.
Given the financial difficulties and collapse of governance the NTI experienced, the shareholder resolved to put the entity under voluntary business rescue process in July 2022. The BRP was supposed to turn the entity around to make it more sustainable and generate income to pay creditors, primary of whom are employees. To do this, the BRP was supposed to have developed a plan within twenty-five days as stipulated by the Companies Act.
However, the BRP has since dismissed and suspended most senior managers of the entity with the Group Chief Financial Officer, CFO, being the latest. This act of impunity was not only for senior managers but since his arrival, many other employees have also been sacked. As a result of this, there is a vacuum at management level and the BRP’s incompetence has been exposed.
Over the last thirty months, the Department and the Gauteng Government have paid over R600 million to the entity without any financial accountability by the BRP. This amount is not inclusive of the multi-journey tickets sales and other operational revenue collected.
The Department has written numerous letters to the BRP asking for accountability and all the letters went un-replied.
Following the failure of the BRP to submit progress reports and account to the Department, the matter of removing him was pursued through the Gauteng High Court in Pretoria. After successfully removing him, the BRP then indicated that he will apply for a leave to appeal the High Court ruling.
The Department then lodged a Section 18 of the Superior Court Act application seeking an implementation of the initial order for the removal of the BRP. The purpose of this Section 18 move is to ensure that the Court ruling is enforced in spite of the BRP application for a leave to appeal.
It is for this reason that the posture of the Department is not to transfer any money to the BRP, as previously money sent for the purpose of paying employees was prioritised for purposes unknown to the Department.
It has recently been widely reported that the Provincial Treasury has allocated R75 million to the Department of Community Safety and Transport Management for NTI. Let me clarify that this is incorrect.
As outlined in the official Treasury allocation letter, the actual amount is 65 million Rand. It should also be noted that the Department has made an advance payment of over 18 million 600 thousand Rand to the entity in June 2024. This advance was provided to cover NTI employees’ salaries. This was facilitated through LabourNet as it was the only option that could be used with certainty that the salaries will be paid.
Taking these factors into account, the correct available amount therefore is just above 46 million 379 thousand Rand. This is because the 18 million Rand referred to earlier is refundable to the Department.
The Department is still to receive a formal report from the NTI on the specific usage of this 18 million Rand. This report should include a detailed expenditure breakdown, necessary for confirmation and compliance verification.
Of late, the BRP has appointed a service provider who is deducting 2% admin fee from employees which is unlawful. From the payroll that was processed by the BRP service provider, a total of 223 thousand Rand was deducted from employees who were paid in March. This service provider which is preferred by the BRP is charging this exorbitant service fee and takes two weeks to process salaries of the employees whilst the LabourNet that was used before, to process salaries within a day.
Some of the NTI employees have alleged that the BRP is selective in paying salaries and has been divisive in his approach. There are employees that have allegedly been paid whilst others are being made to suffer.
The NTI is a 3-D company which must generate its own income and pay its creditors including salaries of the employees. As the company operates routes in Gauteng Province, it receives a subsidy of about R60 million every month. The NTI’s income from this subsidy alone, should enable it to run profitably but the BRP priorities are clearly not for the benefit of the entity.
The Department of Community Safety and Transport Management is a shareholder representative of the entity and does not budget for NTI.
Since the BRP was appointed by the NTI to turn it around has not produced even a single report to the Department nor account to the shareholder, has refused to appear before the Portfolio Committee, and yet wants money from the Government.
Rightfully, the BRP, as the Accounting Officer of NTI must respond to nonpayment of the salaries of the employees.
It is regrettable that the BRP has been using desolate state of employees that he had not paid to come to Mafikeng to demonstrate. The busses that he is sending here should be operating and generating money for the entity.
The BRP has authorised busses to ferry employees to Mahikeng who had been here since the middle of December. This means production at the entity was affected as both the employees and the busses were here.
My appeal to all NTI employees is that they should be part of the solution to the entity and not the problem and go back to work as we are busy trying to come up with permanent solution and as the caring government, we can’t leave the entity to die.
WAYFORWARD
Our interest as shareholder is to see the employees being paid, so our team is looking into the possibilities of making sure that, that is done and within ten days we would have made sure that there is solution to that challenge of salaries is achieved.
Thank you very much.
ISSUED BY THE DEPARTMENT OF COMMUNITY SAFETY AND TRANSPORT MANAGEMENT
