Under the weight of an $18.4 million debt owed by the Transport Board, United Commercial Autoworks Ltd. (UCAL) is scrambling to pay its workers. In turn, it has had to put its creditors on hold.
This was the picture painted by a source close to the vehicle maintenance and repair company who said yesterday that UCAL had managed to pay its workers this week only because its bank had extended its overdraft facility.
“We have no money,” the source claimed.
Chairman of UCAL’s board, trade union leader Sir Roy Trotman, told the DAILY NATION yesterday that he was unaware of the latest problem and would have to investigate.
However, he said there had been an assurance by Government that some of the debt to UCAL, which had been rapidly increasing since 2007, would soon be cleared.
The source said the Transport Board recently made a payment of $57 000 to UCAL but this was a fraction of invoices sent to the board for the last few months of 2013, which amounted to between $400 000 and $700 000.
“The Transport Board, as you know, is in trouble too,” the source pointed out. “They tell us they are taking care of their staff first before they pay anybody else. So when the money for staff gone, they don’t have money to pay UCAL.
“They say the Transport Board is going to be restructured, then Government will go to Parliament with a supplementary to pay everybody. But it is taking too long. If this continues, eventually we will have to start laying off staff at UCAL.”
UCAL has a staff of about 140. The company reportedly receives 30 per cent of the Transport Board’s vehicle maintenance/repair contracts, with the rest going to five garages.
“My message to the Minister of Finance or the Prime Minister is: If you can’t afford to give us all of the money owed now, advance us some money to pay staff and pay other bills,” the source said.
“We are in dire trouble. We have not paid our creditors since September. For many weeks, managers have had to call the workers in and let them know they are going to get paid late.”
The source said UCAL owed the National Insurance Department $1.8 million, Inland Revenue (PAYE) $364 527, the VAT Office more than $2.3 million and creditors $189 241. Corporation tax due amounted to more than $678 000, with an outstanding bank loan of almost $130 000, the source reported.
There is also a debt of $786 000, representing rent due to the Transport Board, according to the source.
UCAL is also said to owe its staff some $1.8 million in backpay.
The source said the company’s problems were compounded by the fact that “with National Insurance and VAT, we are being charged interest and penalties every month.
“We put to Government the suggestion that it should subtract what we owe the NIS and VAT Office from what Government and the Transport Board owe us so we don’t have interest and penalties to pay,” the source reported. “But they said no, that would just create a paper trail on the books and they wanted money.” (TY)