THE decision by the Ministry of Defence to change its food procurement policy has allegedly cost government an additional N$2 million a month since September last year.
Defence minister Nahas Angula admitted that food costs are higher because August 26 Logistics is a new company and things will cost more until the company starts making money.
August 26 Holdings chief executive officer James Auala said part of the problem was price increases of goods, including fuel.
According to sources within the ministry, the increase in the food expenditure is blamed on the procurement system which gave exclusive rights to supply the army with food to August 26 Logistics, a joint venture between the military owned August 26 Holdings and private businessmen.
Sources said since the taking over of food supplies by August 26 Logistics last September, the cost to government has shot up dramatically. This is despite the ministry saying that the deal will save the ministry money and contrary to media reports indicating the opposite last year.
Sources also accused August 26 Logistics of not keeping to their word of sourcing supplies locally.
It is alleged that food is being sourced from a company called African Meals which is owned by Sarel Oberholzer, one of the August 26 Holdings technical partners. African Meals allegedly gets its supplies from Oberholzer’s South Africa-based companies.
Former Windhoek Mayor Mathias Shikongo is the second private technical partner in the August 26 Logistics venture.
Angula said the company is holding talks with the Ministry of Agriculture, Water and Forestry to consider the possibility of sourcing fresh produce from that ministry’s fresh produce hubs.
He added that plans are also underway to get the military to produce its own food where possible to cut cost. He said, for example, the ministry is contemplating setting up bakeries at all the major army bases to cut out middlemen.
He said the aim is still to source everything locally, but added that in the past, local companies with contracts to supply the NDF have been short-changing the ministry by cutting corners and compromising the quality of the food.
Aula said the last time the ministry awarded a food supply contract was in 2009 and that goods would cost more in 2014.
Angula denied that goods where being sourced from South Africa, saying that the intention is to help government to save and not lose money unnecessarily.
The cost of food supplies to the military has raised eyebrows in view of Oberholzer’s past criminal cases.
Records seen by The Namibian show that he has had several brushes with the law in the past. He was convicted of fraud and was fined N$11 000 in 2000. He paid a fine in a charge of pointing a firearm at someone and for two cases of being in possession of undersized crayfish.
The ministry has also given the security of soldiers as one of the reasons they chose to do away with public tenders for the supply of food.
Oberholzer said he was cleared of the criminal charges and that they have all been withdrawn. He added that his companies received clearance certificates from both the South African and Namibian authorities.
Auala said he was not aware of Oberholzer’s past brushes with the law but that he was chosen as a technical partner because he was one of the few reliable suppliers the ministry had.
He further said that Oberholzer’s companies are also supplying schools and hospitals in the country, while Angula said the responsibility of vetting potential partners and suppliers lies with August 26 Holdings.
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