Agri ministry fumbles budget provision

The City of Windhoek has had to borrow N$108 million to pay for a emergency water-supply project that was supposed to be funded by the central government.

10 April 2018 | Government

The Windhoek City Council has approved an N$108 million loan from the Development Bank of Namibia, to be repaid by the agriculture and water ministry, following an administrative misunderstanding linked to several water-supply projects.

Minutes from the council's April monthly meeting state that the loan will be obtained on behalf of the government to help cover the expenditure of the cabinet committee on water supply security for the 2017/18 financial period. A draft agreement for the guarantee from the ministry of finance as guarantor will be submitted, the minutes state.

The government, through the ministry of agriculture, water and forestry, will be responsible for the repayment of the loan in the 2018/19 financial year.

The council also resolved that NamWater will pay N$43 million to cover the loan expenditure and interest obligations.

According to the council minutes, the acute drought experienced between 2014 and 2016 led to an emergency meeting with President Hage Geingob, who was briefed on the seriousness of the situation and the possible impact of the continuously worsening scenario on 20 June 2016.

A national emergency was declared and a cabinet committee on water supply and security was formed, assisted by technical personnel from the City of Windhoek, NamWater and the agriculture, water and forestry ministry.

The committee was tasked to review existing proposed water supply solutions and to finalise a plan to help avert the water crisis over six months and over a period of three years. The council minutes state that securing water supply to Windhoek was taken up by the technical committee “as its highest priority assignment” and to finalise a detailed “survival plan” for Windhoek for three years.

Several projects were identified to help alleviate the water supply issue, resulting in a total of N$350.7 million budgeted for these projects.

The minutes state that the City of Windhoek took the lead and incurred the majority of the expenditure. Of the budgeted expenditure, N$235 million was covered by funding made available by NamWater on instruction of the ministry of finance.

“The shortfall was to be budgeted by the agriculture ministry for the 2017/18 financial year. Unfortunately through an administrative misunderstanding the budgeting of the remainder of the funds never realised,” the minutes state.

This blunder “saw all phase 1 cabinet committee on water supply security projects grind to a halt with all new projects not being able to commence due to the unavailability of funding”.

After postponing all possible work to the 2018/19 financial year, a shortfall of N$108 million for six projects to address improved water security was identified.

Projects highlighted by the ministers include Von Bach Dam refurbishments, at a cost of N$30 million, transactional advisors on the Areva desalination plant for which N$8 million is budgeted, and a new City of Windhoek borehole scheme, at a cost of N$46 million.

N$18 million is budgeted for a replacement pipeline from Kombat to canals, and N$5 million for consultancy fees for a water supply security investigation for the central area of Namibia.

As a result of the lack of budget during the 2017/2018 financial year, the City of Windhoek was tasked by cabinet to “facilitate a bridging loan on behalf of government”.


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