Controversy erupts over N$1-billion Opuwo-Epupa road tender amid allegations of favouritism and lack of approval

… ignoring treasury and works ministry

The Roads Authority (RA) is accused of committing the government to a N$1-billion tender for the construction of the Opuwo-Epupa road project without the approval of the finance and transport ministries.

The tender allegedly favours Otesa Civil Engineering, bidders of the tender have claimed, referring to the N$90-million guaranteed amount needed for the project.

The RA advertised the tender – expected to close on 10 October this year – to upgrade the 75km gravel road between Opuwo and Epupa.

The project, which starts at the town of Opuwo to Otjivize village, has drawn complaints from Namibian bidders who claim the tender has failed to get the approval of the finance and transport ministries.

“The two above-mentioned approvals are prerequisites for any government-funded project,” a source familiar with this matter says.

Other individuals have complained there was no budget for the project.

Some have told The Namibian that a directive from the Ministry of Finance and Public Enterprises was issued in March 2023 to the Roads Authority not to commit the government to contracts without the approval of the treasury and the Ministry of Works and Transport.

The finance ministry has denied giving the RA instructions.

“There has been no directive issued by the ministry that prohibits the Roads Authority or any other public entity from engaging in procurement activities without prior approval from the Ministry of Works and Transport.

“Such a directive would be inconsistent with the Public Procurement Act of 2015, which stipulates that each public entity is responsible for conducting its procurement processes in accordance with the provisions of the act,” the ministry said.

The RA this week denied the allegations.

The authority, under chief executive Conrad Lutombi, has a history of committing the government to road projects without the treasury’s approval.

In 2018, The Namibian reported that the finance ministry blamed the transport ministry for committing the government to road contracts worth more than N$2 billion without consulting the treasury.

Former deputy transport minister Sankwasa James Sankwasa in 2018 said highway road tenders were riddled with corruption.

ROADS AND POLITICS

Otesa Civil Engineering is one of the companies that has benefited from the RA’s controversial ‘Harambe Roads’, which cost the government over N$5 billion.

Otesa, owned by businessman Elmo Kaiyamo, has in the past been accused of getting special treatment from the RA during Lutombi’s era.

In 2016, president Hage Geingob’s Cabinet directed the RA to hand-pick Otesa Civil Engineering to construct the second phase of the Windhoek to Okahandja road – without advertising the tender worth N$1 billion.

Now, there are concerns that the RA has structured the tender requirements for the Kunene road to benefit Otesa, which also scooped other state road tenders in recent years.

Rival bidders claim the current financial and technical requirements for the Kunene road only allow Otesa Civil Engineering and Nexus Group to compete for the tender.

One of the requirements is that bidders should have a guaranteed N$90 million, excluding many Namibian companies.

Another condition is that a bidder should be a 100% Namibian-owned company, in partnership with an emerging Namibian small and medium enterprise contractor.

Bidders are also required to have a minimum amount of N$35 million in cash.

RA DEFENCE

“The procurement method that was used is open national bidding, which complies with the Public Procurement Act of 2015. All the standard procedures were followed,” RA spokesperson Hileni Fillemon told The Namibian this week.

The bidders are also accusing the RA of failing to obtain the necessary tender exemption from the finance ministry for this project, saying its value exceeds the RA’s threshold.

The finance ministry this week confirmed that the RA did not request an exemption from the minister for the upgrading of the Opuwo-Epupa gravel road – therefore no exemption was granted.

The RA, however, insists that the tender procurement process was followed.

“The project is currently on tender and has been advertised, fulfilling and compliant to the necessary provisions of the Public Procurement Act of 2015,” Fillemon said.

“This is an approved government/Road Fund Administration joint project, thus, adequate funding will be made available to commence construction,” she said.

Fillemon also said there were no objections from the RA’s procurement committee, as alleged by bidders.

“The fact that the project is currently on tender means it has received the necessary approval from all the relevant parties. This project is also on the approved RA procurement plan for the 2024/25 financial year,” she said.

Fillemon added that the Opuwo-Epupa project is a critical national project and was approved by the finance minister on 31 March 2023, “as per the RFA’s five-year business and financial plan for the years 2023 to 2028”.

The RA further denied favouritism claims involving Otesa Civil Engineering.

Otesa Civil Engineering spokesperson Uejaa Kazondunge this week said the company, as a contractor, is not responsible for determining public procurement methods.

“The project in question is currently on open national bidding as per the provisions of the Public Procurement Act 15 of 2015. Any bidder is eligible to participate,” she said.

The RA this week said the direct appointment of Otesa Civil Engineering for the Windhoek-Okahandja road upgrade was approved by the board of directors in December 2016.

Fillemon said this was to ensure the accelerated completion of this project within the recommended period.

“Similar capital projects such as phase one of the Windhoek-Hosea Kutako International Airport road upgrade to freeway standards and the Swakopmund-Walvis Bay Road upgrade to freeway standards were all accorded the same treatment, and the contractors’ work was extended via direct appointments,” she said.