Embattled RCC 'captured' by Chinese
A N$570 million loan facility agreement between the Roads Contractor Company (RCC) and a Chinese firm has sparked fears that the parastatal is now a “captured” entity.
Popular Democratic Movement (PDM) parliamentarian Nico Smit said yesterday he believes the RCC and government will now be forced to give tenders to Chinese firm Jiangsu Nantong Sanjian (Pty) Ltd CC, in order to pay back the loan facility.
Finance minister Calle Schlettwein last week said legal provisions were “completely ignored” in the N$570 million loan agreement between the RCC and the Chinese firm.
Schlettwein reiterated the contract was entered into illegally because necessary provisions, not only in the State Finance Act but also in the new Public Procurement Act, as well as the Public Private Partnership Act, were not adhered to.
Moreover, said Schlettwein, some of the road contracts stipulated in the loan agreement have not been budgeted for.
“We are obliged to act and we have therefore approached the attorney-general's office for advice. We have to do that when boards take negligent decisions,” Schlettwein said.
He said the contract, which has already been signed, will have to be set aside if proven it was entered into illegally.
Smit was of the view that the loan would have to be repaid through tenders.
According to him, Namibia had borrowed from China through the RCC and this now meant that the Chinese government held a stake in the parastatal. “In this case, China now having more equity in the Namibian parastatal than government itself can only mean one thing: China owns a Namibian parastatal and is once again taking jobs away from Namibians,” Smit said.
The State Finances Act compels parastatals to get the approval of the ministry of finance when seeking funding for operations.
Schlettwein was recently quoted as saying the Chinese-RCC marriage was illegal.
“I do not have a problem with the partnership, but they signed the contract without following procedures. It is, therefore, an illegal agreement. We cannot support it,” he said.
According to Schlettwein, the agreement, which promised the Chinese company projects, has not been budgeted for.
Smit also believes that government would have to issue tenders for the construction of roads, as a means to pay back the Chinese for the cash flow provided to the RCC for its operations and continued existence.
RCC chairperson Fritz Jacobs did not respond to comments made by Smit when approached.
However, when previously commenting on its new Sino-Namibia relationship, he said the RCC was looking for off-balance sheet financing.
Off-balance sheet financing means a company does not include a liability on its balance sheet. It is an accounting term and impacts a company's level of debt and liability.
“We are currently finalising an off-balance sheet funding solution. This funding does not require government guarantees, as per cabinet decision,” Jacobs said during a previous interview.
OGONE TLHAGE
Popular Democratic Movement (PDM) parliamentarian Nico Smit said yesterday he believes the RCC and government will now be forced to give tenders to Chinese firm Jiangsu Nantong Sanjian (Pty) Ltd CC, in order to pay back the loan facility.
Finance minister Calle Schlettwein last week said legal provisions were “completely ignored” in the N$570 million loan agreement between the RCC and the Chinese firm.
Schlettwein reiterated the contract was entered into illegally because necessary provisions, not only in the State Finance Act but also in the new Public Procurement Act, as well as the Public Private Partnership Act, were not adhered to.
Moreover, said Schlettwein, some of the road contracts stipulated in the loan agreement have not been budgeted for.
“We are obliged to act and we have therefore approached the attorney-general's office for advice. We have to do that when boards take negligent decisions,” Schlettwein said.
He said the contract, which has already been signed, will have to be set aside if proven it was entered into illegally.
Smit was of the view that the loan would have to be repaid through tenders.
According to him, Namibia had borrowed from China through the RCC and this now meant that the Chinese government held a stake in the parastatal. “In this case, China now having more equity in the Namibian parastatal than government itself can only mean one thing: China owns a Namibian parastatal and is once again taking jobs away from Namibians,” Smit said.
The State Finances Act compels parastatals to get the approval of the ministry of finance when seeking funding for operations.
Schlettwein was recently quoted as saying the Chinese-RCC marriage was illegal.
“I do not have a problem with the partnership, but they signed the contract without following procedures. It is, therefore, an illegal agreement. We cannot support it,” he said.
According to Schlettwein, the agreement, which promised the Chinese company projects, has not been budgeted for.
Smit also believes that government would have to issue tenders for the construction of roads, as a means to pay back the Chinese for the cash flow provided to the RCC for its operations and continued existence.
RCC chairperson Fritz Jacobs did not respond to comments made by Smit when approached.
However, when previously commenting on its new Sino-Namibia relationship, he said the RCC was looking for off-balance sheet financing.
Off-balance sheet financing means a company does not include a liability on its balance sheet. It is an accounting term and impacts a company's level of debt and liability.
“We are currently finalising an off-balance sheet funding solution. This funding does not require government guarantees, as per cabinet decision,” Jacobs said during a previous interview.
OGONE TLHAGE
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