Monday, April 22, 2024
14 C
Maseru

Govt faces heat over M6.9 million car rental debt

Business

Mohloai Mpesi

Car owners who had rented their vehicles to the Ministry of Finance and Development Planning have voiced their grievances, alleging they are yet to receive payments for their services.

The aggrieved individuals have taken their concerns to the Public Accounts Committee (PAC) for resolution.

The Ministry of Finance and Development Planning was consequently put under scrutiny by the PAC, facing questions about the accumulated debt, which now allegedly stands at a staggering M6.9 million.

This is despite existing contractual agreements between the ministry and the car owners.

“We have to repair our vehicles, service them, and provide all the necessary maintenance since the government is snubbing us,” Makama Monese said, highlighting the financial strain they are under.

Monese emphasised that instead of reaping profits from their rented cars, they find themselves shouldering repair, servicing, and maintenance costs, as the government has ignored their requests for payment.

The ordeal allegedly stems from an initiative involving the Ministry of Finance and the Lesotho Postbank, which sought to assist entrepreneurs in purchasing vehicles for rental to the government.

Unfortunately, Monese claimed, the collaboration has become an additional source of burden due to increasing interest.

“We were led to a trap and now it has caught us; because the interests keep on increasing,” Monese continued, expressing his frustration.

Monese elaborated on his personal experience, revealing that his car commenced service on February 15, 2021, but has not received payment from March to August of that same year.

According to their contract, he said payments should be made on or before the 15th of every month. He lamented that his car has remained unpaid from May until now.

In response, Ministry of Finance and Development Planning’s Principal Secretary (PS), Nthoateng Lebona, acknowledged the issues at hand and assured that steps were being taken to rectify the situation.

Lebona acknowledged that some delays were due to incorrect procurement processes, which had to be sent back for corrections.

“Actions will be taken on officials who did not process the procurement in order to pay these arias,” Lebona affirmed.

She assured the committee that the ministry was committed to resolving the issue and ensuring that payments are made promptly.

Tumelo Makuoe from the Department of Business Banking at the Lesotho Postbank confirmed that the bank had entered into a Memorandum of Understanding (MoU) with the Ministry of Finance to assist Basotho in purchasing cars for business purposes.

The agreement was structured to accommodate monthly installments, but delays in payments have resulted in penalties and increased financial pressure on car owners.

“This issue is becoming difficult for the car owners because the more they are delayed in paying, the more interest accrues. We pay for their insurance when they are unable to, and that increases their installment,” Makuoe explained.

The outstanding debt of M6.9 million is attributed to various ministries, including Agriculture (M2 million), Education (M194,000), Ministry of Law and Justice (M183,000), Home Affairs (M216,000), Prime Minister’s Office (M1.9 million), Communications (M18,000), Forestry (M216,000), Energy (M425,000), Local Government (M58,000), and Social Development (M270,000).

Lebona expressed concern about the discrepancies in the paperwork submitted for review, emphasising the need for proper documentation for payments to be processed.

She also highlighted that some contracts for cars have expired, necessitating requests for extensions.

Lebona pointed out that actions would be taken against Chief Accounting Officers who were not fulfilling their duties adequately.

She assured the committee that the ministry was committed to resolving the issue and ensuring that payments are made promptly.

- Advertisement -spot_img
- Advertisement -spot_img

Latest article

Send this to a friend