THE PRESIDENCY today announced the termination of the controversial Hosea Kutako Airport expansion deal.
The Namibian reported recently that the deal, worth around N$7 billion, was awarded by the Namibia Airports Company (NAC) for the construction of a new international airport without the blessing of the Office of the Attorney General, which is supposed to approve the agreement before it is signed.
The NAC confirmed that the tender was awarded to Chinese-owned firm Anhui Foreign Economic Construction Corporation.
The presidency confirmed in the press statement that tender procedures were not followed.
It stated, “as in the past the NAC invited expressions of interest regarding the project. A formal tender process was not undertaken. Subsequently, complaints have been aired through legal practitioners to the Minister of Works and Transport, seeking redress.
“The President had tasked the Cabinet committee on trade and economic development to confer on the matter and report back to him. The Cabinet committee met with the minister of works and his officials, as well as with the NAC, and thus reported to the President in December 2015.
“It was determined that the following processes were not duly followed: Firstly, whilst the NAC issued an expression of interest to which several companies reacted, and a formal tender process was not followed subsequently. As such some companies that did not react to the initial expression of interest may have been disadvantaged. An expression of interest cannot automatically translate into a tender process;
“Secondly, since the NAC is not in a position to finance the project, the project will be procured at Government level. The NAC process cannot supplant the Tender Board of Namibia processes; and
“Thirdly, in line with the recently approved Public Procurement Act, 2015, Government will take a keen interest in ensuring that the procurement of services, even from public enterprises and local authorities, in so far as they encumber the Treasury, ought to be approved by the Treasury and the Attorney General – and both these approvals are lacking.
“The President has, therefore, resolved to instruct the Minister of Works and Transport, to act under section 9(b) of the Airports Company Act, 1998 to direct that the NAC discontinues all activities relating to the upgrading of the HKIA, so that the process commences de novo [starting from the beginning] under the auspices of the Ministry of Works and Transport.
“It is hoped that as a Government project, the correct, adequate and transparent tender procedures will be followed.”
The cancellation comes three days after finance minister Calle Schlettwein confirmed to The Namibian that Treasury was never consulted before the agreement was signed.
In short, this means that NAC did not only ignore the office of the attorney general who has to check the legal document before putting pen to paper but the parastatal also signed the N$7 billion agreement with a Chinese company without consulting the ministry of finance which is supposed to fully fund the project.
This tender was discussed last week Friday’s Cabinet meeting where some ministers such as finance questioned the procedures and priority of the project.
Fears exist that state officials and their cronies were lining up to share more than N$500 million of taxpayers’ money in kickbacks.
Well-known middleman and friend of President Hage Geingob, Knowledge Katti, was allegedly set to pocket more than N$100 million in ‘commission’.
It is not clear what will happen to the agreement signed between NAC and the Chinese company. Treasury said it will not recognise it but it’s a well-known fact that government companies are often taken to court and the state has to pay millions in compensation for terminated tenders.