DBC: taxpayers bled dry

TAXPAYERS have had to cough up more than N$100 million over the past two years to help finance the rescue and closure of the Development Brigade Corporation (DBC), a parastatal created to train and provide jobs for ex-Plan fighters from Namibia’s liberation war.

Last year alone, Government paid off a US$10 million loan the failed corporation had borrowed from Bank Industri Malaysia Berhad, through the Exim-Export Bank of Malaysia Berhad, and N$6 million to pay the DBC’s Namibian creditors, the Ministry of Finance and the interim board of the parastatal announced this week. Government officials said they were now closer to shutting down the DBC.However, legislation to abolish the State-owned corporation is expected only towards the end of the year.Failure to pay off the Malaysian loan after it was granted in 1994 caused it to grow from US$7,7 million to US$9,8 million by 2002.In 2001 the debt to the Malaysian bank alone was N$112 million, though the amount dropped by nearly half when the South African rand strengthened against the US dollar – the denomination of the debt.Part of the loan was reportedly used to build houses The Auditor General highlighted the plight of the DBC in the 2002 report, saying: “The financial position of the group and corporation deteriorated to such an extent during the current year that the group’s total liabilities exceed its total assets by N$104,5 million.”By then Government had begun to pull the plug on the DBC.In 2002, the parastatal had accumulated losses of N$146 million, a burden that was ultimately unloaded onto the taxpayer.The financial position of the DBC has once again highlighted the state of many Government enterprises and their increasing dependence on taxpayers for their survival.According to the Institute for Public Policy Research (IPPR), Government spent N$79 million on parastatals in 1991.The amount had risen to N$960 million in 2002-3 and N$950 million this year.Permanent Secretary in the Ministry of Finance, Calle Schlettwein, said this week that the last instalment of the DBC’s Malaysia loan was settled in October, but that some calculations concerning interest payments were still being sorted out.Government, which had guaranteed the loan, was taken to court for refusing to pay after the DBC had defaulted.Interim board chairman Munu Godfrey Kuyonisa said “not much remains” of the DBC, which retrenched 250 workers in 2001.Some of its subsidiaries have been dismantled and assets as well as workers transferred.Over 90 employees of the civil engineering firm Patriotic Construction Company (PCC) joined the Roads Contractor Company (RCC).Kuyonisa said a security service firm and a brick-making company would be sold to private business people.He said the DBC was likely to only be dissolved during the second half of the year.It is not yet clear how many former fighters have been affected by its closure.Other soldiers from the liberation war have been absorbed in ministries and other parastatals or are receiving a monthly grant of N$500 under Government’s so-called “Peace Project” which, like the DBC, is aimed at taking care of the ex-fighters.Government officials said they were now closer to shutting down the DBC.However, legislation to abolish the State-owned corporation is expected only towards the end of the year.Failure to pay off the Malaysian loan after it was granted in 1994 caused it to grow from US$7,7 million to US$9,8 million by 2002.In 2001 the debt to the Malaysian bank alone was N$112 million, though the amount dropped by nearly half when the South African rand strengthened against the US dollar – the denomination of the debt.Part of the loan was reportedly used to build houses The Auditor General highlighted the plight of the DBC in the 2002 report, saying: “The financial position of the group and corporation deteriorated to such an extent during the current year that the group’s total liabilities exceed its total assets by N$104,5 million.”By then Government had begun to pull the plug on the DBC.In 2002, the parastatal had accumulated losses of N$146 million, a burden that was ultimately unloaded onto the taxpayer.The financial position of the DBC has once again highlighted the state of many Government enterprises and their increasing dependence on taxpayers for their survival.According to the Institute for Public Policy Research (IPPR), Government spent N$79 million on parastatals in 1991.The amount had risen to N$960 million in 2002-3 and N$950 million this year.Permanent Secretary in the Ministry of Finance, Calle Schlettwein, said this week that the last instalment of the DBC’s Malaysia loan was settled in October, but that some calculations concerning interest payments were still being sorted out.Government, which had guaranteed the loan, was taken to court for refusing to pay after the DBC had defaulted.Interim board chairman Munu Godfrey Kuyonisa said “not much remains” of the DBC, which retrenched 250 workers in 2001.Some of its subsidiaries have been dismantled and assets as well as workers transferred.Over 90 employees of the civil engineering firm Patriotic Construction Company (PCC) joined the Roads Contractor Company (RCC).Kuyonisa said a security service firm and a brick-making company would be sold to private business people.He said the DBC was likely to only be dissolved during the second half of the year.It is not yet clear how many former fighters have been affected by its closure.Other soldiers from the liberation war have been absorbed in ministries and other parastatals or are receiving a monthly grant of N$500 under Government’s so-called “Peace Project” which, like the DBC, is aimed at taking care of the ex-fighters.