Pascalinah Kabi
THE government has come up with a M3 million bailout package to rescue the cash-strapped Lesotho Freight and Bus Services Corporation (LFSRC).
The decision to bailout the corporation comes barely four months after the principal secretary responsible for transport in the Ministry of Public Works and Transport, Thabo Motoko, told the Sunday Express’ sister paper, the Lesotho Times, that the LFSRC was drowning in debt and in dire need of a M4, 5 million bail-out.
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.
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 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.
And yesterday the Minister of Public Works and Transport, Prince Maliehe, said the cabinet recently resolved to bailout the bus company after realising that it had failed to finance its operations and urgently needed state assistance.
Mr Maliehe said the M3 million would be used to pay salaries for the 54 staffers who have not been paid since April 2018. He said the money will also be used to pay the LFSRC’s suppliers.
“I don’t have papers with me right now but the bailout is between M2, 5 and M3 million and that money will be used to pay salaries for staffers, suppliers and other expenses,” Mr Maliehe told the Sunday Express.
He said they would not privatise the cash-strapped institution, adding that the immediate solutions were to bail it out and appoint a board of directors to govern its operations.
He said once appointed the board of directors would work closely with the ministerial team to find lasting solutions to the entity’s problems. He blamed the previous government for the LFSRC’s predicament.
“We will also appoint a consultant whose findings, together with those of the board and ministerial committee, will be used to determine the future of the company.
“If those findings show that the Lesotho Freight is a liability to government, the government will definitely pull out and privatise it,” Mr Maliehe said.
Mr Maliehe said the corporation’s problems began in 2008 when former Prime Minister Pakalitha Mosisili’s government stopped financing it.
He said the Lesotho Freight was given a M2 million annual subvention from 1994 until 2008 when the government decided that it should use revenues generated from the 20 buses that had been just bought that same year.
He said this brought the number of buses to 33 more but the new buses were not suited to the local terrain. Consequently, the revenue from the older 13 buses was used to maintain the newer buses.
“Furthermore, some of the drivers were hired on the basis of political affiliation even if they did not qualify to drive those buses. As a result, the buses kept breaking down.
“There was a lot of political interference in the running of the Lesotho Freight, so much that the then cabinet ministers and members of parliament owed the Lesotho Freight a lot of money that was never paid.
“Right now, there is an acting managing director but we don’t have a financial director and this shows that there is a crisis to be dealt with at Lesotho Freight. Out of nine buses, only three are functional,” Mr Maliehe said.
Asked why the LFSBC was not using money generated from its properties to stay afloat, Mr Maliehe said the corporation’s M140 000 monthly rental collections from its Leribe, Mohale’s Hoek and Maseru West assets were not enough to run the corporation.
He said the additional M180 000 generated by the three buses was also not enough to keep the institution afloat.