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Sell Victoria Hotel



What the Sekhametsi Property Company managed to achieve with the refurbishment of Agric Bank Building (FNB Kingsway Building), is nothing short of a miracle. Truly remarkable! The Agric Bank building was a dilapidated horror house before Sekhametsi took over, about two years ago. The building was in a state of grime. The walls and windows were dirty, there was no lift for universal access and the interiors were always dark without any ventilation. I remember a time when I went to the Ministry of Energy on the second floor of the Agric Bank building. I could feel my nose sucking in dirty air full of dust. It’s amazing that the conditions didn’t affect the staff members of the Ministry of Energy, considering the lack of fresh air, light and dust that was in the offices. The building has now been given a new lease of life. The walls are clean with a fresh coat of paint. There are two new lifts that have been installed. There’s more light into the building because of an introduction of a foyer (entrance hall). There’s also addition of more retail space that has created the much-needed shop-front in the CBD. What Sekhametsi has demonstrated is that, given a conducive economic and business environment and more especially, a level playing field, the private sector has an ability to organise itself to create value. We have another example of how the private sector came together to form Moruo Developments. Moruo is made up of a group of local investors that converged to create an asset named Pioneer Mall. This is another modern miracle considering the fact that Basotho people are known to have an inability to work together. Pioneer Mall is a shining example of how the private sector created value on a site that was a dumpsite with raw sewer flowing through it. That is the beauty of the private sector. It is able to act faster and more effectively to the public sector/government. The private sector is able to act swiftly and more efficiently because of its obligation to return/repay investors’ money. This is known as Return on Investment (ROI). That’s the reason why Pioneer Mall is always clean. You would never see a person urinating outside on the walls of Pioneer Mall. The security guards would pounce on him in the blink of an eye. The asset has to be kept clean and working optimally in order to retain value and to attract new tenants. The main purpose is the ROI. Other examples of assets that have been built by the private sector and more especially by Basotho business people are buildings such as the MGC Headquarters, Mpilo Boutique Hotel, the Pension Fund Headquarters developed by RPP Developments (Ntate Petlane) and not forgetting Masianokeng Lifestyle Centre, developed by a consortium of Basotho business people together with MPP Property Developments. Those are perfect examples of assets we see on a daily basis and have been developed by the private sector and most importantly, by Basotho nationals. Imagine the value that would be created if the Lesotho government would advise itself to release more sites and buildings to the private sector? This is what I fail to understand about the mechanics in the thought process of our leaders. They say old habits die-hard. The Lesotho government has a very bad habit of clutching onto prime sites and buildings. It’s one of those habits that are very hard to let go or can’t easily be shaken off. Such as a habit of picking one’s nose under stressful moments (during a job interview). The Lesotho government is sitting on assets worth well over 20 Billion Maloti on its balance sheet. This is according to a layman’s valuation of the Government of Lesotho’s assets across the country. I believe that it could be way more than 40 Billion Maloti, if one factors in property, plant and equipment. There is a government owned asset that has been at the centre of controversy in recent months and that is the Victoria Hotel asset. For heaven’s sake, why is the Lesotho government still holding on to this property? Wouldn’t this asset be better off in the hands of the private sector? Allow me to demonstrate how. Had the Lesotho government relinquished total control of the Victoria Hotel asset to the private sector, the asset would have more than quadrupled in value. That is because of its prime positioning in the Maseru CBD. The Victoria Hotel asset has great potential to be remodelled into a mixed-use development mainly because of its prime location. But this cannot happen as long as the asset is in the hands of the Lesotho government. There isn’t an investor in his or her right mind that would be willing to pump hundreds of millions without a guaranteed return on investment (ROI). That is the danger of government owned assets. There’s also a threat of constant political meddling. Let’s take a look at the LNDC Centre, another asset wedged between two of the busiest roads in the Maseru CBD. Why is the LNDC Centre still owned by a government agency named Lesotho National Development Corporation (LNDC)? In my opinion, the LNDC has no business running properties because it is poor at it. The LNDC Centre is another asset that is so mismanaged and in constant state of decay. If you don’t believe me, take a short tour of the basement level and toilets/ablutions at the LNDC Centre. This is a perfect example of the ineffectiveness and inefficiency of government. The LNDC Centre asset will continue to be in a state of decay because there’s simply no urgency and no accountability to investors. There’s also no need to repay investors money. So, the asset will remain dirty, vacant and no one will question even a single thing and this is where the Ministry of Public Works fails dismally. That is the tragedy of government-owned assets versus private sector owned assets. No one cares whether government assets are in a state of decay or not. Look at the state of the Post Office Building and Moposo House. They’ve never been refurbished ever since their opening 22 years ago, in 1998 ka Sepetho. In closing, my advice to the Lesotho Government is still simple and straightforward. Sell off assets that the government cannot manage profitably to the private sector. It can be to indigenous Basotho nationals. I am referring to assets such as the Victoria Hotel, the LNDC Centre, Moshoeshoe One International airport, Setsoto Stadium, ‘Manthabiseng Convention Centre, Basotho Canners factory and most importantly, Lesotho Post Bank (sell immediately if possible). Those assets are better-off in the hands of the private sector. Set-up a fund (Loti Development Fund) and deposit funds from the sale (proceeds of sale) of various government assets. The fund will be useful to generate a new set of assets such as new industrial parks (factories), roads, universities and hospitals. The fund will be a catalyst for a wave of new developments in order to generate thousands of jobs and to generate the much-needed tax revenue. ‘Mako Bohloa

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