TransNamib ‘hand-picks’ Redforce for N$100-million debt-collection tender

Transnamib has allegedly hand-picked RedForce Debt Management to collect over N$100 million owed to the national railway company.

TransNamib’s 2020/21 annual report showed its debt book previously stood at N$75 million, with an additional N$25 million written off as bad debt.

The company’s outstanding debt has since ballooned to more than N$100 million, prompting it to outsource collection services through a 12-month contract.

Yesterday’s announcement of RedForce as the appointed service provider, however, drew immediate backlash from industry players.

They claim they were denied a fair chance to compete for the contract.

The tender was awarded through a request for proposals, but players say it should have been done through open bidding as the tender amount exceeded the threshold.

Some industry players yesterday told The Namibian they intend to challenge the award in court.

RED FLAGS

RedForce Debt Management yesterday denied the tender is worth N$100 million.

An industry player has challenged TransNamib to explain why it chose a request for proposals as the procurement method.

Another industry player, Qaurtle Debt Collection, is among those raising red flags.

The company yesterday wrote to TransNamib chief executive officer Desmond van Jaarsveld questioning the legitimacy of the process.

“We are writing to formally inquire about the procurement process that led to this appointment.

“Despite our efforts, we were unable to find any information on the TransNamib website regarding a public invitation or procurement notice for this service.”

Qaurtle said it also contacted Namibia’s three major newspapers to verify whether a tender notice had been published, but none had any record of such an advert.

Referring to the Public Procurement Act of 2015, Qaurtle said services of this nature must be publicly advertised unless there is a valid reason for using restricted or direct procurement methods.

“Should this appointment have been made through a restricted or direct procurement process, we respectfully seek clarity on the criteria applied and why Qaurtle Debt Collection – a well-known agency in the industry and currently contracted by the Namibia Industrial Development Agency (Nida), a state entity with a comparable debt portfolio – was not included or considered,” Qaurtle Debt Collection manager Michael Jantjies said.

Qaurtle has expressed frustration, saying it is a tenant of TransNamib but was excluded from the process despite this.

TransNamib did not respond to questions sent by The Namibian this week.

However, in its written response to Qaurtle yesterday, the company defended its approach, saying it had reached out to firms it was already familiar with.

Van Jaarsveld said RedForce was appointed through a request-for-proposal process.

“In line with provisions of the Procurement Act, TransNamib developed a shortlist of four firms based on our existing knowledge and information. The shortlisted entities were Redforce Debt Management, Blake and Associates, Revenue Solutions, and Norman Bisset.

“Following a comprehensive evaluation of both technical and financial proposals submitted, Redforce Debt Management was appointed for a period of 12 months based on the overall score in accordance with the criteria set out in the request-for-proposal document.”

TransNamib has been grappling with financial difficulties for years.

In 2022, the government wrote off N$410 million in debt and helped the company secure loans. Last year, TransNamib signed a N$2.6-billion loan agreement with the Development Bank of Namibia (DBN) and the Development Bank of Southern Africa (DBSA) to fund the purchase of locomotives and multipurpose wagons.

‘ALL TRANSPARENT’

Redforce chief executive Julius Nyamazana yesterday said the company was awarded the contract through a transparent and legally compliant procurement process.

“We submitted our proposal in full compliance with the stipulated guidelines and were evaluated based on merit, capacity, experience, and demonstrated THE ability to deliver efficient and effective debt-recovery solutions,” he said.

Nyamazana said any claims suggesting RedForce was hand-picked are unfounded and not reflective of the rigorous procurement process undertaken by TransNamib Holdings Ltd.

“We remain committed to providing high-quality services that meet the expectations and requirements of our clients while upholding the highest standards of integrity and professionalism,” he said.

Nyamazana said the assertion that the tender is worth N$100 million is incorrect.

He said the contract is performance-based and commission-driven, meaning compensation is derived as a percentage of successfully recovered debts.

“There is no predetermined or guaranteed monetary value attached to the contract; its financial value will depend entirely on the effectiveness of the debt recovery process throughout the contractual period.”