RCC’s Chinese partner hits back

Chinese construction company Jiangsu Nantong Sanjian says its deal with the Roads Contractor Company (RCC), which would have seen the embattled parastatal receive a cash flow injection of N$580 million, was unfairly cancelled by cabinet.

The now former RCC board, led by Fritz Jacobs, brokered a deal with Jiangsu Nantong, which would have seen the Chinese firm benefitting from planned and future government projects.

Under the deal with the Chinese entity, the RCC arranged off-balance sheet financing to the tune of N$580 million, while Jiangsu Nantong would have walked away with projects worth N$2 billion.

The partnership would have stretched over 14 years, with a five-year repayment period at 15% interest per year.

However, cabinet stopped the RCC board dead in its tracks, following its failure to seek advice from the attorney-general and the approval of the ministry of works.

Jiangsu Nantong said last week it stood to make profit of less than N$580 million from the deal.

“Taking into account that we would have put additional capital into the development of any project, reasonably we can estimate profit from this cooperation of less than N$580 million,” Jiangsu Nantong said.

It also said it would have been a fair, equal partner in RCC projects.

In the deal cut with the RCC, Jiangsu Nantong would have taken a 47% stake in projects it was involved in with the parastatal.

Jiangsu Nantong said the RCC would have gained liquidity, while also benefitting from the technical capacity the Chinese entity wanted to bring to the table.

“Our agreement did not exclude the RCC from having its own projects nor to be in partnership with others,” Jiangsu Nantong further said.

It also said the matter had been unfavourably handled in the public space.

“The matter could have been handled more professionally and responsibly; it was made out to be the biggest wrong thing, which it was not. If there were uncertainties or provisions not clear in the agreement we could have sat around the table and relooked at these things,” it said.

Jiangsu Nantong said it was not privy to the RCC’s corporate governance controls and said the onus laid on the RCC to report to its shareholder - the government.

“We are not responsible for the internal processes which the RCC had to comply with to obtain approval from government, in order to implement the agreement; that was their responsibility, as it was our responsibility to obtain the financing and the necessary technical capacity for the best of the RCC,” Jiangsu Nantong said.

It added it was regrettable the Namibian government had overlooked a new investment partner, because of institutional infighting.

“It is regrettable that Namibia has missed a golden opportunity to attract a new foreign direct investment partner... We cannot force the hand which had decided to decline the investment, albeit on a very wrong understanding of the actual facts,” the foreign company said.

The company nonetheless said it wanted to invest in Namibia in future and the cancellation of the agreement did not discourage its view of the country as an attractive investment destination.

The deal with the Chinese entity was a last-ditch effort to save the RCC from judicial management.

OGONE TLHAGE