In a last-minute save, 90 employees of the ailing Independent Development Trust (IDT) have been given a three-month extension of their contracts, despite plans by the department of public works and infrastructure to dissolve the state-owned company.
The employees were due to join the unemployment queue at the end of March, but the plan to terminate their contracts was suspended after last-minute negotiations between the public works and infrastructure minister, Patricia de Lille, and the National Education, Health and Allied Workers’ Union (Nehawu) were concluded last week.
The decision to terminate the contracts by March 31 came after De Lille’s decision to dissolve the IDT, which is responsible for social infrastructure and development programme management, within the next financial year. In her letter to the IDT’s board regarding her decision, De Lille cited, among other things, poor project management and performance.
After the removal of the previous board in 2018, an interim four-member board was appointed at the beginning of the 2018-2019 financial year. The board, led by chairperson Thlotse Motswaledi, has been unable to stabilise the organisation. This has led to ongoing issues such as financial sustainability, increased risk of litigation against it and the restructuring of the organisation remaining unresolved.
The public entity’s financial position has worsened over the years, prompting the board to request a capital injection of R160-million from the shareholder (government) to fund its turnaround strategy beyond March, but this has not materialised.
The organisation’s cash-flow crisis is also badly affecting service providers, particularly small businesses, whose invoices are taking too long to be honoured. This has adverse social and economic implications for the country, according to the IDT’s management.
In her letter to the board, De Lille rejected the funding request saying that the entity had already received half a billion rand in bailouts over the past few years, but these bailouts have done little to turn the entity around.
The IDT’s management has accused De Lille of making a unilateral decision to dissolve the company, a position which is supported by Nehawu. The union says the decision to establish the IDT was done through a parliamentary process and that the decision to dissolve it must be conducted through the same process.
In February, the IDT spent R165-million to deliver six schools to various destitute communities in the Eastern Cape. The schools were all fitted with, among other things, new classrooms, multi-purpose centres, science laboratories and dining facilities.
The IDT’s infrastructure programmes have come to a halt as the country continues its 21-day lockdown in a bid to curb the spread of the coronavirus.
Nehawu has proposed that the IDT be turned into a directorate within the public works department instead of a separate state-owned entity. This, according to the union’s spokesperson Khaya Xaba, would save costs and there would be no need to appoint a board.
“[The] IDT is involved in building various schools throughout many provinces. Noting the dilapidated conditions of many schools across the country, why would the government collapse the same vehicle that is playing its role in dealing with that situation?” Xaba asked the Mail & Guardian.
Despite the decision to extend employee contracts, the future of the entity remains unclear. The union has requested to meet with the minister to discuss the matter but Xaba says that has not yet been confirmed as things are “hectic … due to the Covid-19 and we hope to meet her very soon”.
As construction work has not been declared an essential service during the lockdown, IDT’s contractors have decommissioned all projects until further notice, said spokesperson Phasha Makgolane.
Employees are working from home during this period and “all overheads [are] covered from the management fees we charge clients and this will continue,” Makgolane said.
Thando Maeko is an Adamela Trust business reporter at the Mail & Guardian