Monday, January 17, 2022

Cash strapped WUC fails to account for missing P388 million

Hardly a year after he was appointed to the top post at Water Utilities Corporation (WUC), Chief Executive Officer Leonard Nxumalo may be forced to clear his office and retreat to his home country, Swaziland earlier than his planned if he fails to account for millions spent by the loss making parastatal.


Nxumalo was recently summoned by Minister of Minerals, Energy and Water Resources (MMEWR) Kitso Mokaila, who demanded an account for the funds that government has been pumping into the cash-strapped parastatal.


This comes five months after acting Permanent Secretary, N. Mmolawa also wrote a strong-worded letter to Nxumalo warning him to desist from considering additional funding to deal with emergencies, while still holding unutilised funds from government meant to deal with emergencies. In the letter, a copy of which has been passed to Sunday Standard, Mmolawa ordered Nxumalo to be proactive in addressing emergencies. Nxumalo was also instructed to submit a detailed plan depicting the prioritised emergency projects that he intends to cover, clearly outlining anticipated costs between April and October, progress to date and scope to be covered. He was also told to provide monthly progress reports of all WUC projects.




Where is the P388million?


Nxumalo has also been instructed to specifically account for the P388 million that WUC got from government under the pretext that part of the money would be used to pay employees.  Reports indicate that in April this year, WUC employees reported management to the Permanent Secretary for failing to pay them performance rewards, even though it had received funds from government.


After inquiries, Nxumalo responded to the Permanent Secretary on 12 May, promising to deal with the issue. Despite a dismal performance in the financial year 2012/2013, WUC management had committed to payment of performance rewards through a staff notice dated 20th August 2013. However, management later reneged on its commitment and instead proposed a three percent reward across the board. Incensed, employees took the matter to the Commissioner of Labour, who ruled in their favour. While he admitted that WUC had sound commercial reason to freeze the payment of rewards due to financial problems, the Commissioner of Labour ordered the Corporation to implement the rewards because it had committed to doing so.


Had WUC not issued the memorandum promising these rewards, he said, no expectations would have been raised that payment will be made. By January 2015, WUC’s financial dire straits rendered it unable to pay salaries. The reason given was that the Corporation was waiting for overdraft approval from the Ministry of Finance.  At a special joint negotiation committee meeting on 22nd January 2015, WUC management told union leaders that they had requested for about P388million from government which would among other things cover the performance reward for 2012/13 and cost of living adjustment. However, management later failed to live up to its promises.


In e-mail communication to Minister Mokaila on Sunday February 1 at 3:20 pm, which was also copied to Nxumalo, WUC Finance Director Taboka Muke wrote: “There has not been salary adjustments since 2007, a provision of 7 percent, P15million to March 31st, back dated Nov 2014.WUC to pay back P75 million that was provided by Ministry for Glen Valley, Rakhuna and Ramotswa projects, that has been used to pay for other projects that were in progress. 3 months salaries to 31st March 2015- P129 million, WUC failed to pay January salaries due to lack of funds. A portion of other operating expenses, WUC funded projects and decline in sales as a result of drought to March 31st-P109 million. Let me know if you need more info.”


Clash with employees


Morale amongst WUC employees is said to be at its lowest because they have not had a salary increase since 2007. WUC is also broke and it relies on bank overdrafts to pay salaries and suppliers. The Swazi national is said to be having sleepless nights over the contentious issue of cost of living adjustment and performance rewards for employees, as reports indicate that many of them are on go slow. During a meeting between WUC management and union leaders led by Johnson Motshwarakgole, the Corporation’s top brass admitted that the once cordial relationship between employees and management was no more.


Mass resignations


In the financial year 2014/2015, WUC recorded 98 exits, 84 of which were resignations by employees in search of better financial rewards. Chairperson of the WUC Human Resource Committee, Rachel Nekati resigned before the employees’ grievances could be addressed. She was followed by Human Resources Director, Matlhogonolo Mpuang who resigned to join Botswana Accountancy College.  Asked to comment on the issue, Nxumalo claimed ignorance before quickly asking to be excused so he could take a call from the Board Chairman.


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