Fuel facility 'too complex' for Namcor

15 March 2018 | Energy

Mines and energy minister Tom Alweendo has confirmed that the National Petroleum Corporation of Namibia (Namcor) and a strategic partner will jointly manage the country's multibillion-dollar bulk fuel storage facility in Walvis Bay.

Speaking on the matter this week, Alweendo said discussions surrounding the modalities for the partnership were still to be finalised.

He said Namcor would need the help of a strategic partner, owing to the complexity and magnitude of managing such a facility.

“It is not a simple facility… because of its complexity it was felt that Namcor would not have all the expertise [to manage the facility].

We have agreed that we will need expertise,” said Alweendo.

“Right now we are still in discussions to agree on the terms of reference. No company has been appointed and when we do [appoint], we will do it in a transparent manner.”

Alweendo also dismissed allegations that a company had already been chosen to manage the facility.

“There are all sorts of innuendos about who will manage the fuel storage facility. It was agreed that it will be a state facility… that is still the case and Namcor will be the public enterprise which will manage that facility on behalf of government,” said Alweendo.

With the project expected to be completed by June this year, Alweendo also expressed confidence that the facility would be operational by then and that a joint venture partner would be announced in due course.

“Right now we are still in discussions to agree on the terms of reference. No one has been appointed but when we do [appoint], we will do it in a transparent manner,” Alweendo said.

Shifting his attention to the cost escalation of the facility which skyrocketed from N$3.7 billion to N$5.6 billion, Alweendo said this was necessitated because of final project design change.

“It is talked about as if the original costs are based on the original design. The project has doubled in size and in scope. The point to be made is that the cost is not talking about the original project,” said Alweendo.

Finance ministry permanent secretary Ericah Shafudah was slapped with a final written warning for her failure to attend technical committee meetings held to discuss the modalities around the construction of the facility.

CRB, a joint venture between the China Harbour Construction Company, the Roads Contractor Company and local construction firm Babyface Civils, was awarded the tender to construct the fuel storage facility at Walvis Bay.

Since CRB's tender was quoted in US dollars instead of Namibian currency, the cost of the fuel storage rose from N$3.8 billion in 2014 to N$5.5 billion in 2016.

Shafudah was the chairperson of the then tender board, while then National Planning Commission PS Leevi Hungamo chaired the technical committee that chose CRB. Chief legal advisor in the attorney-general's office, Chris Nghaamwa, led the government negotiating team.

Commenting further on the rise in cost, Alweendo said the matter was under investigation.

“Government did institute an investigation. The process is still ongoing,” he said.


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