Netcare says begins scaling down operations

Netcare says begins scaling down operations

MASERU – NETCARE says it has started scaling down its operations at the Queen ’Mamohato Memorial Hospital and four filter clinics after the government refused to settle arrears before the official handover of the properties.
Last week the company’s spokesperson said Netcare was leaving following the government’s decision to terminate its 18-year contract to manage the referral hospital and four filter clinics.

That statement was followed by another in which the company said it was not leaving immediately but will wait for an orderly handover scheduled for August 31.
That however appears to have changed in the last few days with the company issuing another statement saying it was immediately scaling down operations because the government is refusing to settle its bill before the handover is completed.

Netcare says the decision to commence the handover of the facilities and operations follows the repeated failure by the government to settle the arrear payments for services rendered by Tšepong.
It said the government has persistently demanded that Netcare, as the subcontractor, continue to provide full services until 31 August 2021, “notwithstanding that it is currently four months in arrears and is now into the fifth month of unpaid contractual monthly fees”.

In its capacity as a shareholder of Tšepong, and as the major provider of services to the hospital, Netcare has continued to act in good faith and provided ample written notice to Tšepong and the government, as well as follow-up reminders that the government is substantially in default of its payment obligations under the PPP agreement.
“The government has repeatedly reiterated that it has no intention of making these scheduled, contractual payments at this stage, and will only consider making payment after the PPP termination date of 31 August 2021,” the statement reads.

“In light of these circumstances, Netcare is no longer prepared to fund on-going operations on behalf of the PPP,” it said.
“Netcare has provided financial support on numerous occasions over recent years to enable continued operations at the hospital and primary care clinics when the GoL failed to make timely payment for services,” the statement further read.

It says the refusal by the government to pay the outstanding fees clearly places an unreasonable expectation on suppliers to continue providing full services at a substantial level of commercial risk to their businesses.
It says at a meeting last week, the government agreed to Netcare’s proposal to establish a joint oversight committee to ensure the effective and orderly verification and transfer of properties and equipment, stocktaking and handover, as well as the transfer of employees and sub-contractors to the government.

“Netcare will ensure that the transfer process is managed with the support of the labour unions and external in-country lawyers to protect the interests of employees and sub-contractor staff through a seamless transition,” the statement said.

A draft handover agreement, based on the provisions contained in the existing PPP agreement, has been presented by Netcare to the government and the Board of Tšepong.
Netcare and the government furthermore agreed that the transfer of assets, equipment and stock will be overseen by an independent external auditor.

Staff Reporter

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