- Corporation mired in multi-million-maloti debts
- Seeks govt bailout to pay debts and salaries
THE Lesotho Freight and Bus Services Corporation is drowning in debt and in dire need of a M4, 5 million bail-out from the government, the Lesotho Times can reveal.
This was revealed by the principal secretary responsible for transport in the Ministry of Public Works and Transport, Thabo Motoko.
Mr Motoko told this publication that they suspected that the corporation could have landed in the current mess due to years of maladministration and embezzlement of funds by employees.
He also said that the corporation’s financial predicament was exacerbated by the failure by political parties in the former seven parties’ administration to pay M300 000 they owed for bus rentals for the rallies they held in the run-up to last year’s general elections. In addition, a former mining minister (name supplied) is said to owe the corporation more than M200 000 for the parking space that he rents at the corporation’s industrial area in Maseru.
Among other things, the M4 455 598 bail-out that the corporation requires would be used to pay M855 532 in salary arrears for 54 employees who have not been paid since April 2018.
The corporation – established through a government order No.16 of 1987 to provide transport and freight haulage within and outside Lesotho, particularly to remote and under-serviced areas – has also failed to pay M169 786 terminal benefits to its former employees.
The corporation has also failed to remit M955 603 to the Lesotho Revenue Authority (LRA) in Pay as Your Earn (PAYE) taxes and it also needs M654 700 to repair five buses.
M1 819 977 is needed to pay trade creditors and the corporation has since sought a bail-out from the Thomas Thabane administration.
In an exclusive interview with this publication this week, Mr Motoko said government was mulling to bail-out the corporation amid suspicions that it could have landed in the crisis due to years of maladministration and embezzlement of funds by employees.
Mr Motoko spoke to the Lesotho Times in the aftermath of revelations by disgruntled employees that they were struggling to make ends meet due to the corporation’s failure to pay their salaries for the past four months.
“Even as we speak, one of our colleagues died and his family is struggling to raise money for his burial because all our funeral policies have lapsed due to our failure to pay monthly premiums as we have not been paid our salaries since April,” one employee said on condition of anonymity.
He said the corporation was failing to pay salaries as its fleet of buses had all broken down and it was therefore unable to generate income. He said the last of the six buses broke down a fortnight ago.
“In 2015, the minister responsible for transport responded to our plight by availing M12 million for the purchase of six buses but unfortunately the then manager purchased second hand buses which are now having these problems,” the source said.
The source further said that investigations revealed that the former manager embezzled some of the funds and he was subsequently fired over the matter.
Another employee said the former manager’s actions contributed to the government’s decision to abandon the corporation hence the failure to pay them salaries since April.
“We tabled our grievances to the government but nothing is forthcoming despite promises that government is looking at ways to assist us.
“We hope the government will soon come to our rescue because we are in serious trouble and paying for the sins of someone who left the corporation,” the source said. He added that their banks were also threatening to sue them for the failure to service their debts.
The source also said that they feared that the banks would garnish their salaries as soon as the corporation started paying them.
On his part, Mr Motoko said he was aware of the corporation’s failure to pay the workers’ salaries and government was working to address the issue.
Mr Motoko further said that the parastatal’s problems were due to “long-term maladministration” which had not been detected and dealt with on account of the fact that the company had not been audited since “time in memorial”.
He also said the company did not have a board of directors that plays an oversight role over its administration.
“Since its establishment, the corporation has had more than 20 buses. Some of these buses were bought by the previous government of 2008 and other second-hand buses were bought in 2015. Very unfortunately, all of those buses were not compatible with our terrain and all of them except one ferrying people to Mokhotlong have broken down,” Mr Motoko said.
He said only five buses could still be repaired and the corporation has requested for M654 700 to repair the engines and gear boxes among other things.
He said the management had further asked for M855 532 to pay workers’ salaries from April to July 2018, another M169 786 for terminal benefits, M955 603 for PAYE taxes and M1 819 977 to pay other creditors.
“I have asked the acting director to furnish me with information regarding total collections from each bus per month and on average, each bus makes M270 000.
“From that figure, M250 800 is spent on monthly expenses which include diesel (M142 500) tyres (M62 000), maintenance (M30 000) and salaries for the bus crew (M16 200). Looking at these figures, one would ask if it is economically viable to resuscitate this corporation or let the private sector take over,” Mr Motoko said.
Mr Motoko said he did not understand the logic of the corporation in buying tyres for its buses every month.
He said there were a lot of suspicious irregularities they had picked from the documents submitted by the management of the corporation.
In one of the documents seen by this publication, the corporation said it needed M270 000 to repair a bus and in a different document, it stated that it will cost M65 619 to repair the same bus.
“There are very serious suspicious transactions that we have picked up and only an official audit will tell us what is really happening there. But in the meantime, we will procure all the spare parts ourselves. We will not give them money but we will bail them out by directly purchasing the parts from suppliers,” he said, adding that this was only a temporarily bail-out.”
He said he could not understand how the corporation was spending the M133 000 it collected in rentals.
“In 10 months, the corporation makes approximately M1, 3 million only from rentals and yet it has failed to finance itself and is now seeking a government bail-out. The corporation has another three assets in the form of land in Leribe, Butha-Buthe, Mokhotlong and Mohale’s Hoek and these assets should have been used to generate income. Why are these sites not developed?”
Mr Motoko said they would soon appoint a board of directors mandated to investigate and make recommendations regarding the future of the corporation.
“The corporation has not been audited since time immemorial and we will ask the office of the Auditor General to commission an audit which will also enlighten us on the issue of M12 million (that was allegedly misused by the former manager who allegedly purchased second hand buses).
“Part of the problems that have contributed to the shambles in the corporation is the fact that the political parties under the last administration failed to pay the corporation over M300 000 for hiring buses to ferry their supporters for political rallies before the elections. Furthermore, one of the former ministers under the same administration failed to pay rentals after he requested that some of his trucks be kept at the corporation’s industrial area premises,” Mr Motoko said.