For months, Botswana Railways employees watched loan repayments disappear from their payslips only to discover the payments had never reached the banks.
Instead, workers began receiving legal demand letters warning that they had fallen into arrears and could face legal action over loans they believed were being serviced through payroll deductions. Minister of State Presidency Moeti Mohwasa and Minister of Transport Noah Salakae’s attempt to cool the situation in Mahalapye this week has not yielded any results. The government had reportedly pledged an initial P40 million bailout but nothing had been resolved at the time of going to press.
The crisis has triggered a standoff at the troubled state-owned enterprise, with workers converging outside the company’s headquarters and refusing to return to normal duties until management provides answers on how deductions taken from their salaries allegedly failed to reach banks, insurers and other third-party institutions.
The dispute has exposed Botswana Railways’ long-running financial difficulties. Workers have been treated as defaulters despite monthly deductions continuing to appear on their payslips.
One demand letter, issued by Rantao Attorneys on behalf of Standard Chartered Bank Botswana, informed an employee that they had “fallen into arrears” with their repayment obligations and were consequently in breach of their loan agreement.
“As a result of your breach, the entire outstanding balance has become due and payable,” the letter states.
The lawyers further demanded payment within five days and warned that legal proceedings could follow if the amount remained unpaid. The letter represented more than a debt collection notice. It was confirmation that money deducted from their salaries had allegedly not been reaching its intended destination.
According to employees, loan instalments under various salary deduction schemes have allegedly gone unpaid for several months despite deductions continuing to be reflected on monthly payslips. Workers say some banks have since begun recovering the accumulated arrears directly from customer accounts, leaving employees with nothing. The growing anger has centred on the fact that employees contend they fulfilled their obligations every month through payroll deductions.
According to employees, loan instalments under various salary deduction schemes have allegedly gone unpaid for several months despite deductions continuing to be reflected on monthly payslips. Workers say some banks have since begun recovering the accumulated arrears directly from customer accounts, leaving employees with nothing. The growing anger has centred on the fact that employees contend they fulfilled their obligations every month through payroll deductions.
Botswana Railways has acknowledged challenges in remitting employee deductions. In a statement issued on July 14, the parastatal announced that it had “commenced the settlement of outstanding employee third-party arrears”, describing the move as “a significant milestone in resolving one of the key issues that has affected employees in recent years.”
The company said payments would be made “in a phased and structured manner to ensure the orderly, equitable and efficient settlement of all outstanding obligations.”
In an unusually candid admission, Botswana Railways acknowledged the consequences of the delayed payments.
“Botswana Railways recognises the financial hardship, uncertainty and inconvenience resulting from the delayed remittance of third-party deductions, as well as the impact this had on employees and their families,” the company said.
Management further stated that it “sincerely regret the challenges experienced” and assured workers that resolving the matter remained one of the company’s highest priorities.
The admission, however, has done little to calm employee concerns.
Workers question whether the settlement process announced by management will be sufficient to address the full extent of the arrears accumulated across banks, insurers and other institutions.
Conversations among employees suggest concerns are growing over the size of the proposed settlement package.
Representatives who recently met government officials reportedly relayed information that an initial payment of approximately P12 million was being considered. This comes against the backdrop of reports that government is considering financial intervention to assist the struggling parastatal.
Employees say, however, that no meaningful relief has yet reached workers facing immediate pressure from banks and insurers.
The company itself linked the settlement exercise to its wider turnaround efforts, describing the arrears payment programme as “a critical component of Botswana Railways’ broader financial recovery and recapitalisation programme” aimed at restoring financial stability, strengthening corporate governance and ensuring the responsible management of statutory and third-party obligations.
