Desalination talks stalled
While the government had expressed an interest in Areva's desalination plant north of Swakopmund, it never formally made an offer for the plant.
Areva Namibia has told Namibian Sun that while government may have aired their interest in purchasing its Erongo desalination plant, it has never formally received an offer for the purchase of the facility, according to its managing director Hilifa Mbako.
This comes on the back of a recent report, which alleged talks have resumed for the purchase of the plant believed to cost in the region of some N$3.5 billion according to media reports.
Providing an update on the matter, Mbako said the possibility arose for government to put an offer in for the purchase of the plant but that was where it ended.
“In 2014, at the Namibian government's request, the possibility was given to them to present an offer for the acquisition of the Erongo desalination plant. No offer was subsequently presented and the process therefore did not proceed to negotiation stage. The use of the word deal is therefore not correct, as it never reached that stage,” said Mbako.
Areva, when asked to provide a price tag, would not comment and instead said it relied on a variety of factors to come up with a figure for the plant.
Mbako did not provide any details on what valuation methods were used to price the desalination plant and instead said various factors were weighed in to determine the reported price tag of N$3.5 billion at the time government had started negotiations for the purchase of the plant.
“There are therefore many facets, internal and external, to be accounted for when attempting to determine the fair value of such an important asset for the process to eventually translate into a transaction between a willing-buyer and a willing-seller,” said Mbako.
A fair price is determined by the economic value of the asset which is the object of a transaction, including a multitude of factors such as its positive contribution to the resilience and overall economic development of the region or country in which it operates Mbako further explained.
The Windhoek Observer had recently reported that government had rekindled its interest to purchase Areva's desalination plant.
“Currently the Cabinet Committee on Water Supply Security is engaging Areva to try and convince them to lower their price,” minister of agriculture John Mutorwa was quoted as saying.
Mbako confirmed the talks but was not forthcoming with details of the new engagement.
“Government has officially approached us to resume talks over the sale of the desalination plant,” Mbako said.
Quizzed if the company would be willing to revise its asking price, considering how it became the sticking point in concluding the acquisition of the water facility originally built to supply the mothballed Trekkopje uranium project, the Areva executive said the previous offer had expired.
“The offer we gave to government was for three years ago and it expired. It's no longer the same,” Mbako said declining to clarify if the miner's asking price has gone up.
Areva was also not looking into entering into a joint-ownership of the desalination plant. According to Mbako, current legislation regarding joint-ventures with government was limited to financing of planned future expenditure projects.
“Public-private-partnership (PPP) legislation and regulations are currently being established in Namibia, and PPP structures usually apply to the financing and future operations of projects,” said Mbako.
An option Areva would look into would be for long-term water provision between NamWater and government as public agents.
OGONE TLHAGE
This comes on the back of a recent report, which alleged talks have resumed for the purchase of the plant believed to cost in the region of some N$3.5 billion according to media reports.
Providing an update on the matter, Mbako said the possibility arose for government to put an offer in for the purchase of the plant but that was where it ended.
“In 2014, at the Namibian government's request, the possibility was given to them to present an offer for the acquisition of the Erongo desalination plant. No offer was subsequently presented and the process therefore did not proceed to negotiation stage. The use of the word deal is therefore not correct, as it never reached that stage,” said Mbako.
Areva, when asked to provide a price tag, would not comment and instead said it relied on a variety of factors to come up with a figure for the plant.
Mbako did not provide any details on what valuation methods were used to price the desalination plant and instead said various factors were weighed in to determine the reported price tag of N$3.5 billion at the time government had started negotiations for the purchase of the plant.
“There are therefore many facets, internal and external, to be accounted for when attempting to determine the fair value of such an important asset for the process to eventually translate into a transaction between a willing-buyer and a willing-seller,” said Mbako.
A fair price is determined by the economic value of the asset which is the object of a transaction, including a multitude of factors such as its positive contribution to the resilience and overall economic development of the region or country in which it operates Mbako further explained.
The Windhoek Observer had recently reported that government had rekindled its interest to purchase Areva's desalination plant.
“Currently the Cabinet Committee on Water Supply Security is engaging Areva to try and convince them to lower their price,” minister of agriculture John Mutorwa was quoted as saying.
Mbako confirmed the talks but was not forthcoming with details of the new engagement.
“Government has officially approached us to resume talks over the sale of the desalination plant,” Mbako said.
Quizzed if the company would be willing to revise its asking price, considering how it became the sticking point in concluding the acquisition of the water facility originally built to supply the mothballed Trekkopje uranium project, the Areva executive said the previous offer had expired.
“The offer we gave to government was for three years ago and it expired. It's no longer the same,” Mbako said declining to clarify if the miner's asking price has gone up.
Areva was also not looking into entering into a joint-ownership of the desalination plant. According to Mbako, current legislation regarding joint-ventures with government was limited to financing of planned future expenditure projects.
“Public-private-partnership (PPP) legislation and regulations are currently being established in Namibia, and PPP structures usually apply to the financing and future operations of projects,” said Mbako.
An option Areva would look into would be for long-term water provision between NamWater and government as public agents.
OGONE TLHAGE
Comments
Namibian Sun
No comments have been left on this article