GOVERNMENT needs N$2,6 billion to complete the Neckartal Dam project, agriculture ministry permanent secretary Percy Misika said.
Misika revealed this during a visit to the dam site earlier today.
He said the cost of building the dam has escalated from N$3,2 billion to N$5,7 billion, and government has paid N$3,1 billion so far, but needs another N$2,6 billion.
Treasury has recommended to Cabinet to source N$600 million from NamWater and N$1,3 billion from government’s infrastructure development fund, which is still in the process of being established.
Misika said that the agriculture ministry has already transferred N$155 million meant for the construction of the Kavango West regional office and staff houses to the construction of the dam.
He said NamWater would issue a bond of N$200 million, borrow a further N$200 million, and draw an additional N$200 million from its reserves to help finance the shortfall.
The ministry would refund NamWater over five years.
“The transfer of the Neckartal Dam infrastructure to the bulk supplier’s balance sheet would not bring immediate financial relief. It will take time before it gets any benefits,” he stated.
A work stoppage in September was the third this year by Italian contractor Salini Impregilo SpA after government failed to pay.
Misika explained that N$355 million recently paid to Salini to resume work on the dam construction after the latest work stoppage came from NamWater’s reserves (N$200 million) and the agriculture ministry (N$155 million). The ministry owed N$600 million in outstanding invoices, which Salini demanded payment on before work would resume.
Government is expected to settle the outstanding amount by the end of this week, he said.
Government also paid N$180 million to Salini after losing a legal battle over the costs of delaying the start of the project.
The dam construction was set to start in April 2013, but only commenced five months later.
Leopoldt Niipare, a director in the agriculture ministry, also revealed that about 14 households which had been relocated to make way for the Neckartal Dam project would soon be compensated.
He said about N$4 million had been allocated for this purpose.
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