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Controversial lease deal: Govt pays N$11 million for unused office

The government has spent around N$11 million over the past 10 months to rent an office building in Windhoek without using it.

The building is owned by Erastus ‘Chicco’ Shapumba, a businessman who has profited from controversial state-backed lease agreements.

Information seen by The Namibian shows that the government entered into an agreement with Shapumba, starting in April 2024, for the rental of Shapumba’s olive-green building situated across NamPost in the city centre.

Top government officials like youth minister Agnes Tjongarero are not happy about the deal, while fingers point to executive director Erastus Haitengela, who is now blaming other government officials for failing to occupy the building.

According to estimates, the government was required to pay N$1.1 million each month to City Place and Property Management Pty, a company owned by Shapumba.

The N$1.1 million includes N$990 000 plus 15% VAT for three years. In three years, Shapumba could get over N$40 million from this lease deal.

The agreement, prepared by lawyer Sisa Namandje’s law firm, was signed by Shapumba and executive director at the works ministry Esther Kaapanda on 13 and 14 December 2023.

The Namibian last year reported that the government claimed they would be paying N$450 000 per month, which totals N$5.4 million a year.

However, it turns out the government is paying almost double that amount and has not been using the building for close to a year.

IN THE DARK

Tjongarero yesterday said she only “heard” about it.

“I heard that we are paying money but we have not moved in. I think it was also in the newspapers. I heard about it but I don’t know if it’s the truth really. So does this mean we are paying rent for two offices, for the building we are currently in and the unoccupied one?” she asked.

She added: “I am not aware of the payments but I heard about it. The best person you can contact about the situation is the executive director.”

The Namibian last week reported that Haitengela and Tjongarero have had a falling out.

Asked whether it is a deliberate attempt to undermine her authority when things happen at the ministry without her knowledge, Tjongarero responded: “Both. I have written to the secretary to Cabinet because this issue is getting out of hand.”

BLAME GAME

Some sources are pointing fingers at Haitengela who is accused of undermining the outgoing youth minister, but Haitengela blames the Ministry of Works and Transport.

“Firstly, you were supposed to call the Ministry of Works and Transport as they are the one who signed the agreement. Not us. Secondly, the works ministry is responsible for the assessment of the building. They agreed that the building is worth occupying. Thirdly, they are the ones making the payments, not us,” Haitengela says.

He says they, as the user ministry, have been pushing to occupy the building.

The youth ministry currently occupies the buildings belonging to the Namibia Industrial Development Agency and the ministry of education.

“The ministry of education has given us a notice to vacate because they need their people to move in. That’s why we ended up agreeing to the new building that is conducive to us,” says Haitengela.

The delay, according to him, has to do with partitioning.

“We wanted the building to be partitioned according to how we feel it should be, especially on the ground floor where we want to put a youth zone. It took a bit of time. People also went on leave in December,” he says.

Haitengela says he wrote a number of letters to the ministry of works to speed up the process.

“My last letter was sent last week. We are really under pressure as the ministry to move. Also, we need to be together in one building. So basically, the delay is with the partitioning. We have asked the works ministry to speed it up so we can move in as a matter of urgency,” he says.

DEFENCE

Kaapanda yesterday said the youth ministry must put it in writing because she does not understand how someone needs to move into the building but are unable to do so because of the Ministry of Works and Transport.

The Namibian told Kaapanda that letters were allegedly sent to her ministry, and she said: “As far as I know, they (youth ministry) were busy demarcating/partitioning that building and it’s not us who are responsible for that.”

She said the demarcation is being done by the user ministry because the works ministry does not know their specifications.

“They need to demarcate the building in terms of their office needs, how many boardrooms they want, the server rooms, kitchens, etc.,” she said.

A HISTORY OF LEASING DEALS

Questions sent to Shapumba were not answered.

Shapumba has a history of receiving controversial deals from state-owned enterprises.

In 2013, the Opuwo Town Council sold the government-owned Newman Katuta Stadium located in the then central business district for around N$1.3 million.

In 2016, the Oshakati Town Council sold erf 1342, previously known as Omatala Shapumba, for N$2.5 million – an amount considered to have been cheap.

The Namibian in 2023 reported that the state-owned Agro-Marketing and Trade Agency (Amta) paid N$57 million to Shapumba for two deals involving land.

One was for Amta to lease a Windhoek-northern industrial property for N$45.9 million, while another payment of around N$10.5 million was for leasing a plot at Oshikango.

An Amta investigation found that the parastatal did not conduct due diligence on the Windhoek property, and that the Oshikango land had no description or a title deed.

Last year, The Namibian reported that urban and rural development minister Erastus Uutoni reportedly approved the sale of land at Oshakati worth an estimated N$30 million for just N$8 million to Shapumba.

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