RCC ventures into housing and rail construction

11 Aug 2013 13:59

The Roads Contractor Company (RCC) will start participating in the serving of land and the construction of affordable housing, after it successfully completed its turn-around plan.
The move is aimed at further increasing its revenue to N$600 million which is currently set at N$400 million, while its also intends to fulfil its mandate which it says is not only restricted to roads.
“RCC can according to the Act and its mandate from the shareholder, also carry out work in other civil engineering infrastructures such as railways, houses, dams, ports, Turnkey or EPC projects,” argues RCC Chief Executive Officer, Engelhard Haihambo.
The intentions to move into the housing construction sector are anticipated to commence before the end of the year.
Haihambo says the RCC’s Growth Strategy has been adopted by Cabinet and provides business and entrepreneurial guidelines on how the company can start participating in executing other civil engineering infrastructural projects.
Gladwin Groenewaldt, NHE Senior Corporate Communication Officer says, “Each parastatal has its own mandate as to why they came into existence. We were establish to cater housing for the needy, especially the low to middle income. Unless RCC has a different niche they saw in market, or perhaps they have an approach that would be similar to complement on what they are doing they certainly cannot deviate from their mandate.”
Explains Haihambo, “We will not compete with NHE, NamPort or even TransNamib. Those parastatals are not the constructors, they are just the owners. If a tender to construct houses in Ondangwa by NHE is issued we will participate. Under normal circumstances, we should have tendered even for the expansion of Walvis Bay port by NamPort, or servicing or railway by TransNamib. That is what we are now focusing on.”
In April 2008, RCC opted for a turn-around plan after its operations were spiralling out of control.
The RCC recovered from a loss of N$65 million between the 2007/2008 financial year to a profit of N$17, 4 million in 2010/2011.
“We had to dig deeper to come out of that situation. We also improved from a loss of N$23, 5 million (2007/8) to N$28 million in 2011/12,” he says.
In September last year, the company launched a new 2012-2017 Strategic Plan to complement to fruits of the turn-around plan.
Approximately 64% of the annual gravel roads rehabilitation and maintenance budget of the Roads Authority is awarded to the RCC on a negotiated tender and for the rest of the projects; RCC competes with other private contractors.
While the competition since inception has been tough as RCC costs structure was expensive and thus made its tender prices uncompetitive, the situation has since been improved by the turn-around plan, says Haihambo.
He adds, “We have 14 strategic areas in the plan that have so far been transformed into strategic projects which are spearheaded by respective departmental heads. We have reached a point where we have established a sustainable business with excellent organisational efficiencies in areas such as cost management, project management, corporate compliance and performance management. We will not take the portion of SMEs because we have always worked with them on roads construction, we will still work with them.”