The Vehicle Maintenance Company of TT (VMCOTT) owes $1.24 million on NIS payments and $1.1 million on PAYE for employees since it used the money for these payments – deducted from employees’ salaries – to pay suppliers and keep its business afloat.
But VMCOTT management which appeared before Parliament’s Public Accounts Enterprises Committee yesterday was told by PAEC member Dr Nyan Gadsby-Dolly, no company can operate the way VMCOTT’s been doing.
And PAEC chairman Wade Mark ordered the Works and Finance Ministries – which supervise VMCOTT- to find an allocation in two weeks to fund VMCOTT to meet its outstanding statutory obligations like NIS and PAYE.
The PAEC yesterday interviewed officials of VMCOTT and the Works and Finance Ministries on VMCOTT’s 2013-14 audited statements.
VMCOTT CEO Natasha Prince said VMCOTT’s cash flow situation – where debts from State agencies are outstanding- has affected it, including its payments to its long list of suppliers.
VMCOTT has entered arrangements to pay some suppliers monthly.
Prince confirmed VMCOTT owes on its statutory obligations such as $1.24 million on NIS payments, $1.1m on PAYE payments and $450,350 on Health Surcharge. She said she was “not aware” if this was a breach of law.
Prince said funds deducted from employees’ salaries for the NIS and other payments were used to keep VMCOTT afloat and pay suppliers. The latter was to prevent court action and keep VMCOTT’s rebranded name clean. She said VMCOTT’s situation was drawn to Works’ attention.
Prince said so far there’s been no problem and two employees who retired received their pensions. She said VMCOTT understood the situation was serious and was looking at cash in hand/ cash flow for making payments.
Sums owed to NIS and other payments are from 2010 – 2013.
There was a cash flow issue including payments from agencies – including the police service – and challenges with suppliers.
The situation was tackled in 2018 but continued in 2019-2020. The Ministry of Works acting Permanent Secretary Dhanmatee Ramdath said since 2015, both ministries worked with public sector agencies to collect money owed to VMCOTT.
PAEC’s Gadsby –Dolly warned that the debt on obligatory payments would roll over if there was lack of systems to recover State agency debts owed to VMCOTT.
“No company can operate the way VMCOTT’s operating now – it redounds to employees’ detriment,” she added, urging efforts to deal with it.
Finance Ministry’s Sharon Mohammed said Finance would continue to work with VMCOTT to ensure it meets statutory obligations.
Mark who said the situation was an emergency given the involvement of workers’ payments, asked if Finance could intervene and allocate funds for this.
Mohammed said Works Ministry had to make representation to Finance and the Budget Division will examine it and make some allocation in the (May) mid-year review. Ramdath said the matter was considered a grave indictment against VMCOTT for not meeting its statutory obligations and Works would work with Finance on it.
However, Mark speaking after Gadsby- Dolly, told both ministries to come up with an allocation in two weeks for VMCOTT to clear its commitments to NIB, BIR and other agencies – and report to PAEC on it then.
“We don’t want a repeat of this scandal – this is unacceptable, inexcusable and indefensible!”Mark declared.
Careful VMCOTT end up in graveyard- Mark
Ramdath said Works injected funds into VMCOTT annually – from $12m and $40m in 2013 and 2014 – to $10m annually now to assist its operational costs.
PTSC owed VMCOTT $6.4million.
Another debtor, the TTPS appointed a team to review invoices and records, paid $194,000 up to January and is paying “slowly but surely”. She wasn’t aware of a letter which Mark noted from TTPS – to Parliament – stating VMCOTT had to show documents regarding payment of debts from 2001.
Ramdath said VMCOTT”s situation was problematic even from inception. Economic and pandemic challenges have further affected it.
Ramdath feels VMCOTT is viable and has been rebranded and re-engineered, exploring private/public partnership. She hoped it would make a profit by 2025.
VMCOTT chairman Neil Bennet (Lt Col retired) said VMCOTT’s $91m loss was over 20 years, “Your (UNC) Government established VMCOTT in 2001 and it got State subvention of $40 million; reduced to $10 million in 2016,” he told Mark.
Bennet said the Board inherited a lot of mismanagement from predecessors. He said while there’s a Cabinet mandate for state agencies to use VMCOTT for vehicle work, this isn’t fulfilled by ministries. He said VMCOTT would advance with more state agency plus private sector work.
Mark who noted Simpson’s Funeral Home among VMCOTT’s clients advised Bennet to provide recommendations for VMCOTT’s future, “Or (VMCOTT) might end up in the graveyard, it’s necessary to get recommendations to save yourself from burial.”