Chinese companies in N$4,5 billion road tenders

SHINOVENE IMMANUEL and SONJA SMITHTHE state-owned Roads Authority of Namibia wants to award a Chinese state-owned company a road tender worth N$475 million without publicly advertising the contract.

The company, China Railway Seventh Group, is currently constructing the Windhoek to Okahandja highway.

If this deal goes through, Chinese companies will be involved in road contracts worth more than N$4 billion, irking struggling Namibian companies.

Unik Construction, the Chinese company constructing Swapo’s N$750 million headquarters in Windhoek, has also become one of the biggest beneficiaries of state-funded road contracts.

Namibia’s construction sector lost 487 jobs last year only.

The Roads Authority (RA) has in the past 10 years, with the backing of state funds, improved Namibia’s road network across the country, including revamping the Windhoek-to-Okahandja road that was once a deadly route.

However, the parastatal faces criticism for favouring Chinese companies mostly owned by the Chinese government.

Three months ago, the RA awarded a N$532 million contract to China Henan International Cooperation Group to construct the B1 road between Mariental and Keetmanshoop.

In 2015, the RA awarded a N$900 million contract to China Railway Seventh Group to construct phase one of the Windhoek-to-Hosea Kutako International Airport highway.

The RA now wants to award a N$475 million road tender to China Railway Seventh Group without publicly advertising the contract.

The tender is for the construction of a 5km stretch of the Windhoek-to-Okahandja highway.

The Namibian has seen a letter that RA chief executive officer Conrad Lutombi sent to minister of finance Iipumbu Shiimi, asking for an exemption to directly award another section of the Windhoek-Okahandja road tender to China Railway Seventh Group.

Lutombi said awarding the contract to the same Chinese company would save the government unnecessary costs and time.

“… and will further eliminate the need to pay an advance payment,” he said.

According to Lutombi, the road agency has already requested the Chinese company to put together their bill of costs.

“[The] Roads Authority has also requested the consultant, VKE Namibia, to do a thorough due diligence and a negotiation process of the priced bill of quantities submitted by the contractor,” he said.

Lutombi said he has already obtained support from the Road Fund Administration (RFA).

“It is important to note that the works of Section 1 TR1/6: Windhoek-Okahandja was not originally budgeted for in the current financial year, but RA has obtained support from the RFA for a bridging facility of N$40 million for works to commence within this current financial year,” he said.

The Ministry of Finance has not responded to the request yet.

Unik Construction has been in the news for constructing Swapo’s N$750 million headquarters, which is linked to Chinese state funding.

The company has become one of the biggest beneficiaries of state-funded contracts, with up to N$3 billion in deals on its current portfolio.

Last month, Unik Construction won a tender to construct a 6,8km road in the Ohangwena region for N$24 million.

Unik Construction is currently constructing the highway between Swakopmund and Walvis Bay for N$967 million.

Local companies are using this contract as an example of how the RA is favouring foreign companies at the expense of Namibians.

In addition, Unik is also upgrading the railway line between Arandis and Kranzberg for around N$2 billion.

Unik has denied being favoured.

Secretary to the company’s chief executive to officer, Frank Liu, says he does not think Chinese companies are being favoured in Namibia.

“My boss is not around at the moment but … I don’t think so,” he says.