Local partner offered N$10m to abandon tender

23 December 2019 | Infrastructure

A local construction company, Onamagongwa Trading Enterprise (OTE), which until recently was a joint-venture partner with China Railway Seventh Company, claims that it was offered N$10 million to give up its 20% stake in the construction of phase one of the Hosea Kutako International Airport dual carriageway.

The road project is valued at approximately N$500 million.

OTE has since been kicked off the project, with China Railway claiming that it could not meet set deadlines. OTE owner Martyn Ipinge says the Chinese company wanted the whole contract.

“After we received a phone call from the Roads Authority (RA) officials, we went and met with the Chinese at a guesthouse in Klein Windhoek, where we received an offer from them to buy us out. There was a representative of China Railway Company. They offered to buy us out for N$10 million,” Ipinge said. The offer was not good enough, Ipinge said, as he wanted to learn from the JV partner, having completed the tarring of 30 kilometres of the Oshakati-Oshikuku road. “Our thing was, we already built a road from Oshakati to Oshikuku, and ours was to learn so we will not be able to accept the N$10 million for you to get out of the project,” he said.





Little did he know that his refusal to accept the N$10 million offer would be the start of his problems.



“When we refused, that is where the whole problem started because we had already signed. When the work started, they started with delaying tactics. If they could have given us the scope of work and that is where we had the problem with the client not forcing these guys to sign the scope of work,” he said.



The scope of work, Ipinge explained, would determine what would be required from each JV partner in the earthworks and construction and tarring of the dual carriageway. The scope of work was only given last year November.



OTE claimed that it had insisted that the scope of work had to be signed but China Railway delayed the signing. OTE also accused the RA which is the client, of never insisting on the document being signed.



“The client [RA] never forced China Railway. We have been writing letters, we even went to the extent of appointing lawyers. By then, they even started ration work and you cannot plan ahead,” he said.



“Even when it came to the portions of road given, they were the ones that needed to install culverts, but for us to do the bulk servicing work, they needed to do their work first,” he explained.



“Any dispute needs to go for arbitration but the RA is not intervening,” he said.



According to them, numerous meetings were held that included RA officials and the consulting engineers of the project. These meetings were attended by RA CEO Conrad Lutombi.



China Railway has denied the allegations.



“OTE ran into financial difficulties soon after the commencement of the project and owe money to various Namibian entities,” it responded.



“The problem in the JV is OTE's failure to perform its obligations in terms of the agreement due to its financial situation. OTE's insolvent state resulted in it not being able to perform in terms of the agreement. This has resulted in unnecessary delays within the project.”



According to China Railway, OTE was only able to complete 3.5% of the work required of the scope of the work required instead by RA.



China Railway also claimed that OTE had removed its equipment from the project site.



“It is further noted that OTE has fully stopped the construction activities and removed their equipment on the site by themselves and without informing us since the end of July 2019,” China Railway said.



The company claimed that senior employees of OTE had threatened China Railway staff members with violence.

JEMIMA BEUKES AND OGONE TLHAGE

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