Namcor in bind over N$1,7m job

THE National Petroleum Corporation of Namibia’s management is in a fix over a N$1,7 million payment to auditing firm Deloitte after the finance ministry said it was unauthorised expenditure.

The state-owned enterprise, set up to secure fuel for Namibia, contracted Deloitte to investigate managing director Immanuel Mulunga over a N$2,2 million tender he awarded to a Malaysian company, Hyrax Oil, which is represented locally by Alex Warne, an alleged friend of Mulunga.

However, there were issues with the Deloitte contract as it was awarded without the authorisation of Mulunga, who at the time was on special leave.

Mulunga told yesterday that he wrote to finance minister Calle Schlettwein on 9 May 2018, asking whether they should go ahead with paying Deloitte, which was pressurising Namcor for payment.

Mulunga approached Namcor chairperson Patrick Kauta over the issue, and was instructed to make the payment. Namcor paid Deloitte, which at first wanted to withhold the investigation report.

“As management, you don’t want to say no to the board as you might be (found to be ) insubordinate,” Mulunga stated.

Kauta yesterday also confirmed that Deloitte was paid.

Meanwhile, Mulunga said he has not yet seen the investigation report, even though it was completed nearly a month ago.

The drama around the payment arose when Schlettwein only responded to Mulunga’s letter a month later, on 22 June 2018, stating that the contract with Deloitte was concluded outside the scope of the Public Procurement Act, which means it was considered illegal by finance.

“The payment, if any, in terms of this acquisition would amount to unauthorised expenditure,” the finance minister stated.

According to the procurement law, only the managing director can sign off on contracts. Since Mulunga was on special leave, the contract was thus irregularly concluded.

Mulunga said he only received Schlettwein’s letter on Monday (25 June), which he said was problematic as they had already issued payment two weeks earlier. The minister’s delayed response has now left the Namcor in a tight spot to either ask Deloitte to return the money, or find an alternative way to recover the money.

Initially, Mulunga had been against paying Deloitte as he stated that neither he nor the Namcor procurement committee had any role in the procurement of that company’s services.

In a letter to the board on 27 April 2018, Mulunga explained that the contract was irregular, and that he had not verified whether Namcor had the funds to pay Deloitte.

However, Mulunga yesterday told that if he had not paid, it would have looked like he had something to hide.

understands that the investigations cost around N$3 million, as Deloitte added further charges.

Linus Hamukoto of the procurement policy unit of the finance ministry responded to Mulunga, saying that Deloitte added a further N$1,7 million to the costs of the investigation.

“The total costs excluding value added tax is estimated at N$3,2 million, as per Deloitte’s own estimates,” he said.

Hamukoto was seeking clarity on whether to pay Deloitte as procurement processes had not been followed, and the letter of engagement seemed to have been signed off by the board chairperson.