BDC job cuts gather momentum
Mbongeni Mguni | Wednesday April 16, 2014 14:45
BDC’s new MD, Bashi Gaetsaloe, said his approach was to deal with the ‘re-organisation’ as swiftly as possible, in a manner that is fair to all parties. “In doing that, we have opened dialogue with staff and they are communicating to us through open channels,” he told Mmegi yesterday. “We have agreed that we will share everything with them on how decisions will be made.”
The looming retrenchments are part of a new three-year strategy to turn the formerly profitable state entity around from the losses it has suffered in recent years. The losses, which were measured at P22.5 million last year, are largely a result of poor investment decisions and failure of subsidiaries. The ‘poor investments’ include the recent write-off of P511 million in the Palapye glass-manufacturing project, a highly publicised initiative, which became a subject of parliamentary enquiry. “The focus is not on retrenching, but rather transforming the organisation and getting the right business model. Staff have embraced that and have ideas for the business,” said Gaetsaloe.
The new MD said a counsellor had been engaged to provide affected workers with emotional, financial and employment support during the rationalisation exercise. The retrenchments are expected to take place in the three to six months the BDC has set as phase one of its three-year strategic turnaround plan.
Besides the organisational restructuring, the phase will result in overhaul of key processes such as risk management and governance models.
Gaetsaloe told journalists yesterday that poor handling of processes were at the heart of the problems bedevilling the ‘old BDC’. “Processes such as risk management were broken and this meant that every time we looked at a proposal, we were looking at it with sub-optimal eyes,” Gaetsaloe said.
“We made bad decisions and invested where we should not have and approved projects that were not viable and that’s the biggest thing that I have noticed. Over the years, we forgot about investing in commercially viable institutions and we focussed on our development agenda. People were bringing projects that did not make sense and we were funding them,” he explained.
He said this was a sub-optimal use of funds, which is not what BDC should do. “We have to create viable and sustainable businesses.”
After rebuilding in phase one, the BDC will focus on growing its business and building profitability. The last phase entails the pioneering of regional and international investments.
Gaetsaloe joined the BDC last month, following the high-profile departure of his predecessor, Maria Nthebolan last year in the wake of corruption allegations at the multi-million Pula Palapye glass project.
The new MD, who has had a glittering career in the private sector, is expected to play the “Mr Fix-It” role at BDC, rebuilding the corporation’s systems and returning it to profitability. “My mandate is to return BDC to profitability, viability and relevance. This is Day One of what we are calling ‘the new BDC,’” Gaetsaloe said.