GOVERNMENT has injected M5 million to bail out the troubled Lesotho Freight and Bus Services Corporation. Part of the bailout will be used to pay M866 281, 05 in salary arrears to 54 employees and M370 271, 91 in terminal benefits to former employees.
The corporation, which was established through the government order No.16 of 1987 to provide transport and freight haulage within and outside Lesotho, particularly to remote and under-serviced areas, also needs M1 819 977 to pay creditors and M600 000 to repair its fleet of buses.
The principal secretary responsible for transport in the Ministry of Public Works and Transport, Thabo Motoko, recently told the Lesotho Times that the Thomas Thabane administration splurged the money to save the state entity from collapsing under the weight of massive debt due to years of maladministration and embezzlement of funds by employees.
The M5 million bailout package was released in response to a debt report that was compiled by Lesotho Freight’s Acting Chief Executive Officer, Mahlomola Moea. Ms Moea compiled the report at the behest of the Lesotho Freight’s newly appointed board of directors namely, Victoria Nqheku, Advocate Christopher Lephuthing, Lephoi Makara, ‘Mamothibe Chaole and Matela Khojane.
Although Ms Moea’s report does not capture all the corporation’s debts, it has been previously reported that Lesotho Freight owes at least M955 603 to the Lesotho Revenue Authority (LRA) in Pay as You Earn (PAYE) taxes.
In an exclusive interview with this publication, Mr Motoko said the M5 million bailout will be used to settle salary arrears, terminal benefits for its former staffers and other debts that run into millions of maloti.
“The M5 million bailout is only for one financial year in which we already have salary arrears of M866 281.05, M370 271.91 terminal benefits and over M2 million debts for goods and services as well as repairing buses,” Mr Motoko said.
He said the Lesotho Freight board would carry out a due diligence exercise that involved the careful examination of all invoices submitted by the corporation’s creditors before making any payments. He added that the bailout would also be used to repair three buses.
Out of the 15 buses that the corporation currently has, Mr Motoko said only three were operational while another three could be repaired. The other nine were not serviceable and due for disposal.
Mr Motoko also expressed concern over the varying bills that the corporation had submitted to his ministry for the repair for each of the bus, saying the discrepancies raised serious questions regarding the sincerity of the reports given to the ministry.
For instance, he said M200 000 was requested for the repair of one bus and M75 000 was requested for another.
He said as a result, his ministry would not process any payments in the absence of audited financial statements.
“The audited financial statements will show us the true picture of financial status of the company and if indeed those people are earning the kind of salaries indicated in the report (Moea report).
“We are not just going to pay their salaries on the basis of based on the (Moea) document. It is not enough and we will do our own checks and balances. We will have to talk to the Auditor General to audit us and if does not have the capacity, she will have to commission a private firm to conduct the audit.
“Therefore it will take time before the workers’ salaries are paid. In addition, we will not immediately pay creditors but we will first carry out thorough investigations before we pay them. There are various ways of establishing if these people (creditors) are indeed owed by the corporation but all of this is dependent on the decisions of the (Lesotho Freight) board.”
Mr Motoko said a lot needed to be done to restore Lesotho Freight to its former dignity, adding even the corporation’s premises in Maseru were a sorry sight as they were dilapidated.
He said the government to sell some of its shares to the local transport operators and engage a private company to run the corporation.
“I think that we should sell shares to the transport operators because most entities that were 100 percent owned by the state have collapsed. We don’t want to see Lesotho freight experiencing a similar fate. It has already received two bail-outs from this government and this is the third one,” he said.
He said although Lesotho Freight first went down spiral after the government stopped giving it an annual M2 million subvention, it did not make sense for government to allocate a subvention to a corporation that was supposed to be profit-making on a daily basis through bus fares and rentals.
“Honestly speaking I believe that there is mismanagement. Lesotho Freight had 13 buses when it was bailed out in 2008. They were given another 20 buses which brought the total to 33 busses. Why is that they did not diversify and even allow those buses to transport factory workers (in urban areas)? Why is it that private bus operators are still in business, buying new buses and succeeding while Lesotho Freight has failed to resuscitate itself with 20 new buses?
“How does a corporation with 33 buses just collapse? Why didn’t they diversify immediately after realising that the buses were not suitable for our terrain? Why didn’t they sell those buses and invest money in something productive like developing the eight sites that we have in Mokhotlong, Butha-Buthe, Thaba-Tseka, Mohale’s Hoek, Qacha’s Nek, Leribe and the two in Maseru?”
Mr Motoko said there was need to downsize as there was no justification for having 54 workers to man just three buses.
He added that there was also a need to fill the top management positions of managing director, head of workshop, head of finance, head of administration and head of operations that were vacant.