While the Na­tion­al Main­te­nance Train­ing and Se­cu­ri­ty Com­pa­ny Ltd (MTS) bor­rowed $300 mil­lion to pay em­ploy­ees and Na­tion­al In­sur­ance Scheme con­tri­bu­tions, Gov­ern­ment min­istries and agen­cies owe the com­pa­ny over $600 mil­lion.

The Min­istry of Ed­u­ca­tion (MoE) owes ap­prox­i­mate­ly half of the debt. The Min­istry of Hous­ing and Ur­ban De­vel­op­ment, Min­istry of Sport and Com­mu­ni­ty De­vel­op­ment, the Ju­di­cia­ry and the Po­lice Ser­vice owe large debts.

Get­ting that mon­ey is un­cer­tain as the MTS Chief Ex­ec­u­tive Of­fi­cer Lennox Rat­tans­ingh said the com­pa­ny has cred­its on its books from the last 15 years but even­tu­al­ly wrote off some. The rev­e­la­tion came up dur­ing the vir­tu­al pub­lic hear­ing of the Joint Se­lect Com­mit­tee on State En­ter­pris­es. 

Chair­man An­tho­ny Viera com­mend­ed the MTS on its op­er­a­tions, say­ing its re­ports show it is ful­ly com­pli­ant with its statu­to­ry oblig­a­tions. Viera said the MTS was self-suf­fi­cient, up to date with its fi­nan­cial state­ments, and does not owe mon­ey to any State agency. 

How­ev­er, he ques­tioned if the Board of Di­rec­tors failed in their fidu­cia­ry du­ty to pro­tect and safe­guard the com­pa­ny’s in­ter­est.

He said that while the MTS earns $540 mil­lion in rev­enue an­nu­al­ly, it lost per­son­nel be­cause it could not pay salaries and lost con­tracts be­cause of the none pay­ment by State clients. It al­so led to con­trac­tors los­ing their work­force be­cause of late pay­ments. The MTS cash flow prob­lem al­so pre­vents it from get­ting a prop­er prop­er­ty eval­u­a­tion.

“The com­pa­ny is pay­ing its bills. It does not owe Gov­ern­ment and State agen­cies. But Gov­ern­ment and State agen­cies owe over $600 mil­lion. That is a lot of mon­ey on the road, and it means you are al­most op­er­at­ing with one hand tied be­hind your back,” Viera said

He ques­tioned how the MTS could earn so much yet have fi­nan­cial prob­lems. Rat­tans­ingh ex­plained that the MTS in­voic­es clients ap­prox­i­mate­ly 42 mil­lion per month. Salaries cost $35 mil­lion per month. He said al­though clients are part of the State, the MTS still bids for projects. 

“We have a re­ceiv­ables chal­lenge of over $600 mil­lion, and this mat­ter has es­ca­lat­ed over the last few years. I guess it is coun­try­wide. It is world­wide. It is hap­pen­ing all over the place. How do we sur­vive when our ma­jor client is the Min­istry of Ed­u­ca­tion? They alone are ow­ing us about $300,000,” Rat­tans­ingh said.

He said MTS wrote to the var­i­ous min­istries seek­ing pay­ment, but it re­mains a chal­lenge. 

Not­ing the MTS reg­is­tered un­der the Com­pa­nies Act, Viera said the Board of Di­rec­tors owe their pri­ma­ry du­ty to the com­pa­ny and not the Gov­ern­ment and its agen­cies. His con­cern was that some large debts be­came statute-barred be­cause the com­pa­ny on­ly had four years to bring an ac­tion­able claim. 

How­ev­er, Rat­tans­ingh said that as a State agency with a 99 per cent State clien­tele, the MTS could not take le­gal ac­tion be­cause it would be con­trary to the State En­ter­prise Per­for­mance Mon­i­tor­ing Man­u­al. There­fore, it has to use per­sua­sion.

Viera said this placed the MTS in a co­nun­drum as a court would tell the CEO that his oblig­a­tion was to the com­pa­ny and the 15-year-old debt be­came un­en­force­able be­cause the com­pa­ny did not take ac­tion. He said it was un­fair to the com­pa­ny and the board mem­bers to be in this po­si­tion. 

Act­ing Per­ma­nent Sec­re­tary of the Min­istry of Pub­lic Util­i­ties (MPU) Nico­lette Duke said the MPU ac­tive­ly li­aise with oth­er min­istries to re­mind them of the debts. Duke said the MPU com­mu­ni­cat­ed with the Min­istry of Fi­nance (MoF), in­di­cat­ing that it had not re­leased funds to cer­tain min­istries for spe­cif­ic pe­ri­ods. She said that the MoF would look at re­ceipts and rev­enues to de­cide how it re­leased funds to those min­istries.

Sen­a­tor Wade Mark said the com­mit­tee must con­sid­er a meet­ing with Min­is­ter of Fi­nance Colm Im­bert to set­tle the mat­ter. Mark be­lieves it is up to the com­mit­tee to de­vise ways and means to ad­dress the ris­ing debt port­fo­lio. 

“This is a com­pa­ny that is ex­treme­ly chal­lenged be­cause of the delin­quen­cy on the part of a num­ber of State en­ti­ties.”