A task team led by the department of public works and infrastructure is expected to hand over a detailed plan at the end of this month on the dissolution of the embattled Independent Development Trust (IDT).
This follows last month’s decision by Minister Patricia de Lille to dissolve the state-owned entity, which is responsible for social development programme management services and delivering social infrastructure such as schools and clinics, after years of underperformance.
The company is facing numerous difficulties including financial unsustainability, increased risk of litigation against it, a high vacancy rate and an unconcluded restructuring process.
According to the public works department, the entity’s financial problems continue to worsen; the department has to supplement its operational costs by R21-million every month.
Earlier this month, 90 employees were given a three-month extension of their contracts, which were due to be terminated at the end of March. The lifeline was extended after talks between De Lille and the National Education, Health and Allied Workers’ Union (Nehawu).
Nehawu’s spokesperson, Khaya Xaba, has previously told the Mail & Guardian that the dissolution of the trust should be through a parliamentary process, because the IDT was established through Parliament.
In emailed responses, De Lille said she is yet to be advised by the IDT board if the tabling of the matter to dissolve the entity is feasible, given all the administrative and legal requirements. An exit committee for the trust has in the meantime been set up to chart a way forward.
De Lille said the first step in dissolving the IDT involves a detailed exit strategy that will be concluded after discussions with relevant parties about the financial problems at the IDT, its assets and liabilities and the numerous litigation cases against it. A memorandum for the Cabinet and a board resolution also need to be drawn up.
The exit strategy is being prepared by a multidisciplinary task team, established by the minister, which is working during the lockdown period. The memorandum will then be presented to the Cabinet and the president for consideration.
As the department of public works and infrastructure presses on with its plans to dissolve the IDT, employees say they have been left in the dark about the process.
In a draft letter the IDT employees have accused the public works department of ignoring plans to save the trust and save jobs. These plans include turning the IDT into a commercial entity to which the department would allocate infrastructure projects. This, they said, would allow the company to be sustainable without a capital injection from the fiscus.
The letter follows an M&G article last month, which revealed that De Lille plans to dissolve the IDT within the next financial year. The employees have claimed that this decision was taken unilaterally by the minister, who has not considered the effect “of the closure on the programme and projects that [the IDT] is currently delivering”.
The group of employees further claims that the IDT’s clients have withdrawn ongoing projects since it was revealed that the trust is to be dissolved, which is resulting in the IDT’s revenue collection and sustainability “going out the window”.
“Most of the projects the organisation is implementing are multi-year projects. As a project manager you cannot take a long-term decision in a project due to this uncertainty,” the letter reads.
The IDT’s spokesperson, Phasha Makgolane, denied claims that the trust has lost clients following the publication of the M&G’s article.
The employees’ letter will be sent to De Lille when full operations at the IDT resume, presumably after the national lockdown eases up.