NamPower struggles to recover N$5,6m from Swiss company

Senior NamPower officials are disgruntled over the national electricity company’s battle to recover N$5,6 million paid to a Swiss company for the repair of power station equipment in India.

The money was paid as a tax payment for the import of equipment, known as the transformer 12, for a substation in the Zambezi region.

In November 2016, NamPower issued a tender inviting companies to submit quotations for “logistics services: transportation of a power transformer from the Zambezi region to Mumbai, India, and back”.

NamPower managing director Simson Haulofu has confirmed to The Namibian that the commpany subsequently awarded the deal to Swiss-owned Kuehne & Nagel Pty Ltd.

He says this tender had to comply with the Indian government’s import regulations.

“In adherence to the regulations set by the Indian government, custom duty and provisional goods and services tax (GST) were paid to Indian customs for the temporary import of the transformer.

“This custom duty and GST were meant to be refunded after the repair process was completed and the transformer was cleared for re-export to Namibia,” he says.

Indian multinational company CG Power & Industrial Solutions repaired the transformer, which was returned to Namibia in November 2018.

But around five years later, NamPower has yet to recover the funds.

“Despite fulfilling all the necessary requirements, the temporary custom duty and GST have not been refunded to Kuehne & Nagel, thus preventing them from refunding NamPower,” Haulofu says.

“Kuehne & Nagel has made several attempts through the years to reclaim the temporary import duties from the Indian customs, but their efforts have been unsuccessful,” he says.

‘PAY BACK’

The tender was awarded to Kuehne & Nagel Pty Ltd in March 2017 for N$9 million, according to the contract agreement.

Documents seen by The Namibian show an exchange of communication between Haulofu and the company’s representative, Wilmarc Lewies, about the refund.

“During the implementation of this contract, NamPower was informed that refundable duties and goods and GST should be paid to the Indian customs authority to clear the cargo. This amount will be refunded to NamPower once the transformer is repaired and exported out of India,” Haulofu said in a letter.

According to documents, the N$5,6 million was paid on 1 October 2017.

The payment was made based on the understanding that it was to be paid back to NamPower when the cargo is cleared for return to Namibia.

Haulofu later threatened that should the money not be paid within 14 days, NamPower would take legal action.

Lewies, who represented Kuehne & Nagel during the deal, wrote back, saying that CG Power & Industrial Solutions was unwilling to pay back the money.

His letter to Haulofu is dated 20 August 2020.

“We reiterate that because of your supplier’s failure to provide the documentation required by the Indian customs authority and to offer a reasonable explanation with regards to the discrepancy found by customs on the identification plate, Kuehne & Nagel is currently unable to process the customs duty refund on NamPower’s behalf,” Lewies said.

He added: “We must point out that the refund claim will be for the customs duty amount only, as the GST amount would have been refunded automatically to Compton Greaves after three months of import. NamPower will have to claim the GST amount from Compton Greaves directly.”

FURIOUS

The matter has attracted criticism among senior officials in the company.

The Namibian has seen a series of emails exchanged between staff members in June this year where they proposed options to help recover the funds.

NamPower’s chief financial officer, Michael Gotore, suggested that the Indian High Commission be involved for assistance.

“May I once again raise the matter of the outstanding refund on the above which we need to recover. We need to engage the Indian High Commission for assistance in recovering this and that process must involve technical people who are familiar with the events,” Gotore said in an email sent on 22 June to the company’s general manager of transmission, Vermeulen Braam.

NamPower’s value added tax accountant, Elizabeth Luaanda, said the amount is marked as doubtful debt.

“For now this amount is fully provided as a doubtful debt in case auditors ask,” she said in an email sent to Gotore on the same day.

In another email, NamPower’s senior manager of internal audit, Christo Bezuidenhoudt, wrote to NamPower’s senior manager of engineering services, Leandro Kapolo, and chief legal officer Zoe Nambahu that Kuehne & Nagel informed the company that the money would not be refunded.

“On 3 March 2021 Kuehne & Nagel informed NamPower that time has expired (12 months) to claim the refund, and customs required original documents (which are not available from the contractor). They also forewarn in their mail that NamPower will not receive the monies,” Bezuidenhoudt’s email reads.

He asked: “Who will be debarred in terms of the public procurement regulations?”

Kapolo in turn asked Nambahu for legal advice to recover the funds.

“Zoe, as some of you might be aware, we have been attempting to recover our money that was paid during the repair process of the first of the Zambezi transformers by the OEM. Many meetings have been held to this effect, emails and official correspondences have been sent to and from, and up to now we have not been successful in all these attempts.”

He added: “We are seeking legal opinion on how to take this further to recover the money that should have been returned already.”

Gotore, Luaanda, Nambahu and Kapolo declined to comment when approached by The Namibian this week.

Kuehne & Nagel’s regional spokesperson, Kasia Pearce, told The Namibian yesterday that the company does not disclose details of their customers.

“Our values are based on customer trust, confidentiality and professional business relationships,” Pearce said.

The latest revelations come a week after The Namibian reported that Haulofu said no official has been charged in connection with the loss of equipment worth N$8 million.