THE Namibia Institute of Pathology, a once rising star of SOEs in Namibia, has been hit by yet another challenge as workers demand salary increases that could add an extra N$4 million a month to the ailing parastatal's bill.
The NIP has had to weather numerous crises, including the ongoing battle with the entity's former CEO, Augustinus Katiti.
The workers and their union have turned the screws on the NIP, which the company says could have adverse financial implications.
In correspondence in possession of The Namibian, public enterprises minister Leon Jooste and health minister Kalumbi Shangula say they will not effect the 10% salary increment for the 2018/19 and 2019/20 financial years which the workers demand.
The two ministers sent a joint response dated 4 October to the Namibia Public Workers Union (Napwu)'s general secretary, Petrus Nevonga.
Their reaction came after NIP employees staged a demonstration and handed over a petition to the line ministry, demanding an increase in salaries, transport and housing allowances.
"As stated in the letter of the minister of public enterprises to the line minister and the NIP board, dated 23 April 2018, the 10% salary increment is way above the current and forecast inflation rate of 6% for 2020," the two ministers' joint statement reads.
The letter also stated that the situation at the NIP has reached critical levels, where the institute has not been able to fully meet its obligations to some of its suppliers, resulting in the suspension of accounts, withholding of the delivery of critical items such as reagents, and the worsening of trading terms.
"The effect has been the inability of the NIP to conduct certain types of laboratory tests, and this has in turn resulted in delays to the treatment of many patients in the country," Jooste and Shangula said.
The two ministers highlighted that should the 10% increment be implemented, it will result in an additional N$4 million monthly bill to the NIP.
At present, NIP has a monthly shortfall of N$6 million, which the two ministers say will drive the shortfall to N$10 million monthly.
"This will negatively impact the operations of NIP and undermine its capacity to fulfil its mandate of providing the crucial laboratory services, which is one of the central pillars of Namibia's public healthcare system.
"More pressure on the cash position of the NIP may in fact lead to the company becoming technically insolvent," Jooste and Shangula explained.
The ministers thus advised that NIP employees reconsider their demands and engage their employer for alternative "solutions and options", which will be in the best interest of the company.
The workers have been gunning for a salary increment of 10% across the board for 1 April 2019, a transport allowance increment of N$200 for the 2019/20 financial year, and a housing allowance increment to 35% of basic salary for 2019/20 financial year.
Napwu had in May accused the NIP's management of having breached an agreement signed in 2017.
NIP's monthly operating expenses currently stand at N$44 million, including a wage bill of N$21 million, the ministers stated.
Yesterday, Napwu hit back at the ministers, saying their response means nothing to them.
"Their arguments cannot overshadow the agreement signed. It still stands, and will go ahead as stipulated by the law. And this is not a demand, but a legitimate agreement between two parties.
"We are not going to negotiate with those two ministers, but with the NIP. I don't know why they are speaking on behalf of the company. Their response means nothing to Napwu," Gabes Ambunda, Napwu's deputy secretary general, stressed.
In May this year, The Patriot reported that the NIP was spending N$40 million annually on its 43 senior employees.
The institute receives N$39 million as a monthly grant from the line ministry.
The NIP is a state agency which handles blood testing and other pathology services. It operates 40 laboratories across the country.