NAC blocks politicians

THE Namibia Airports Company is considering awarding the contract for extensive upgrades to the Hosea Kutako International Airport to an international company through a public private partnership (PPP).

A PPP allows private companies to invest in state projects, and to jointly manage entities created through such partnerships.

A source close to some NAC board members told The Namibian last week that the parastastal was pushing for an arrangement in which an international company would build the airport at its own cost.

The airport deal is the same N$7 billion contract which was dubiously awarded in 2015 to a Chinese company, but cancelled by a Supreme Court order earlier this year.

The NAC board, chaired by Rodgers Kauta, does not want to award the contract in its previous form, but wants to issue a public invitation to companies to bid for the contract as part of the public-private partnership.

People familiar with the board proposal said instead of government pumping N$3 billion into the new airport, the NAC would instead call for international companies to fund and build the airport and jointly run it with the parastatal for up to 10 or 15 years. Kauta yesterday confirmed that “PPP is one of the solutions that shall be offered to the shareholder (government) to approve. The advantage of a PPP is that there shall be no immediate financial obligations on NAC/government. The contract shall be tight to ensure maximum benefit to NAC/government over the PPP period”. He said the ministries of finance, public enterprises and works, along with the attorney general, would be involved in the process.

Kauta also indicated that “NAC is in the process of scoping the total cost of the upgrade and we are 80% done. Once the full cost is ascertained the shareholder shall be approached to either fund via Central Procurement Board and/or allow a PPP to be initiated”. Sources said the NAC has started talking to the finance ministry to advise it before making a Cabinet submission later this year.

Finance minister Calle Schlettwein said yesterday his ministry requested all ministries to submit projects that could be part of PPPs.

He said he was not aware of the NAC proposal for a PPP, but said that could be the route to go on the airport deal, as long as it was structured to benefit government.

The decision by the NAC board is contrary to the wishes of the works ministry, which has been putting pressure on the NAC to give preferential treatment to Chinese contractor Anhui Foreign Economic Construction (Group), which was awarded the N$7 billion contract in 2015.

President Hage Geingob announced in April this year, during his state of the nation address, that government has restarted a “transparent and cheaper” tendering process for the upgrading of the Hosea Kutako International Airport.

The works ministry wrote to the NAC a few weeks after that, saying the parastatal should readvertise the contract and specifically invite Anhui to tender for the airport job.

The NAC board is said to have flatly rejected that directive, saying all companies will need to be treated fairly, without giving the Chinese firm special treatment.

The NAC board is also aware that several officials at the parastatal and the works ministry benefited from bribes estimated to be worth around N$140 million.

People familiar with the deal suspect that there are officials who want a specific firm to get the contract at all costs because pockets were lined two years ago.

Anhui Foreign Economic Construction Group denied in court papers filed last year that it paid bribes or any incentives (kickbacks) to Namibian officials to push the project its way.

The Namibian reported in February that attorney general Sacky Shanghala was part of a clique of officials, including works minister Alpheus !Naruseb and works permanent secretary Willem Goeiemann, who favoured Anhui Foreign Economic Construction Group to go ahead with the expensive airport rehabilitation project.

Goeiemann issued a statement a few days after the report, denying any unholy alliance between him and the two Cabinet members. !Naruseb threatened to sue The Namibian for reporting that he was part of that clique.

The NAC board has been complaining about extensive political pressure from the works ministry.

In fact, The Namibian understands that a NAC board member suggested that they should consult Shanghala for a legal opinion, but the suggestion was overruled by the other directors who felt Shanghala would give an opinion favouring the Chinese firm.

The international airport contract is not the only deal which has caused a clash between the NAC and the works ministry.

In March this year, the NAC rejected verbal directives by deputy works minister Sankwasa James Sankwasa to implement the Hosea Kutako renovations for N$156 million, as well as the Ondangwa airport’s N$210 million upgrade contract. Minutes of that March meeting state that “the deputy minister was asked (by board) to put his instructions in writing. It is on record that the deputy minister does not want to confirm his instructions in writing”.

The NAC said the two airport contracts were not cleared by the finance ministry, and that his instructions were illegal. Sankwasa declined to comment yesterday.

The stand-off does not end there. The new board used private lawyers when it stopped several questionable deals, including the N$210 million renovation tender of the Ondangwa airport.

Board documents also show that the works ministry told the NAC that the legal fees paid by the parastatal regarding the contracts were illegal.

“The instruction pertaining to the legal fees is illegal. The ministry can do their investigations, but cannot instruct the (NAC) board of directors not to pay the lawyers. It is a tactic to stop the lawyers from working for the NAC, or to frustrate the processes,” the board said in March.