The Ministry of Agriculture, Water and Land Reform last week dropped a High Court case in which it was demanding N$252 000 from Kiat Investment Holdings over non-payment of rent on the Oshakati Eloolo Abattoir.
The ministry, which owns the abattoir, dragged the war veterans-controlled Kiat Investment Holdings to the High Court, citing six-month rental arrears from July to December last year.
Kiat Investment Holdings entered into a 25-year agreement with the agriculture ministry in August 2017 to rent the Oshakati Eloolo Abattoir. The agreement was binding until 2042.
According to the agreement, the company was to pay monthly rent of N$42 000, which is equivalent to N$504 000 per year.
High Court documents filed by the ministry suggest that Kiat Investment Holdings breached the lease agreement and that it has failed to operate the abattoir for a period of more than three years since the ministry completed the renovations and handed over the abattoir.
The ministry alleges that Kiat Investment Holdings has failed to remedy or rectify its breach despite demand to pay.
“Accordingly, the plaintiff has cancelled the agreement, which it was entitled to do,” the ministry said in the documents. The ministry further said Kiat Investment Holdings failed and/or refused to pay N$252 000 payable since July last year.
In August last year, the ministry said it gave Kiat Investment Holdings its first notice of termination of agreement and in that notice the ministry demanded that Kiat Investment Holdings rectify its breach within 30 business days from date of receipt of the notice, failure which the lease agreement would be cancelled without further notice.
However, during a case-planning conference last week, the ministry dropped the case.
In her August 2022 letter to Kiat Investment Holdings, executive director in the agriculture ministry Ndiyakupi Nghituwamata said the Oshakati Eloolo Abattoir has not been in an operational state for five years since the lease agreement came into force and for three years since the government completed the renovations and handed over the abattoir to Kiat Investment Holdings in July 2019.
She added that despite numerous consultations between Kiat Investment Holdings and the ministry regarding the operations of the abattoir, the ministry’s consideration to offer Kiat Investment Holdings a second opportunity in 2020, as well as repeated commitments from Kiat Investment Holdings to operationalise the abattoir, no effective measure was implemented.
“As a result, the livestock producers in the northern communal areas still have no access to a secure formal market for their livestock,” Nghituwamata said at the time.
In 2020, Kiat Investment Holdings formed a joint venture with Ningbo Agriculture Investment Group, a Chinese entity, but the venture did not last. And since the Ningbo Agriculture Investment Group left the abattoir in 2021, the factory stopped operating and workers were laid off.
Kiat Investment Holdings chief executive officer Paully Iipinge referred The Namibian to Sikunawa Negumbo, who he said is the company’s spokesperson. Negumbo’s number was not reachable when The Namibian tried to reach him.
Agriculture minister Calle Schlettwein said: “Please contact our executive director, since this is an administrative matter.”
The ministry’s spokesperson Jona Musheko told The Namibian yesterday the contract between the ministry and Kiat Investment Holdings provides room for arbitration.
“Hence, we put other processes on hold while we exhaust the provision of the contract. Given the nature and stage of this matter, we are not comfortable sharing more details,” Musheko said.
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