N$500 million bailout for RA

25 February 2019 | Infrastructure

The Road Fund Administration (RFA) has bailed out the Roads Authority (RA) to the tune of N$500 million, so the ailing parastatal can settle outstanding invoices.

Speaking on the issue of outstanding invoices and suspended projects, RA CEO Conrad Lutombi said the contractors will be paid in full during the course of the week, starting today.

“We are in the process of settling invoices. We found a solution. Contractors will resume work from Monday or Tuesday,” said Lutombi last week.

He denied the allegation that the RA engaged in 'illegal' projects.

“There is no government project that we have started that we will not finish. The RA is a responsible organisation and there is no way government would have paid,” said Lutombi.

According to RFA CEO Ali Ipinge they had been approached two weeks ago.

“We were asked to meet government halfway.

We have to support government efforts where we can,' he said.

The money was backed by a government guarantee, Ipinge added.

“We can further help government, provided they assist the RFA with a guarantee,” he said.

According to Ipinge, government had honoured facilities it had taken up in the past. “Previous facilities taken up have been fulfilled by government. We hope and are 100% sure government will settle this facility,” Ipinge said.

Contractors working on RA projects had suspended work last week owing to a lack of payments.

Lutombi appealed to transport ministry executive director Willem Goeiemann last Monday to make funding available to the RA, so it could settle its obligations.

Lutombi told Goeiemann that the RA currently faces a serious problem because of government's failure to pay road contractors and consultants.

“The current daily compounded losses due to the suspension of work, as a result of invoices, will translate into millions of dollars, estimated to be ranging between N$15 million and N$30 million per month per project, depending on the size,” he said.

Confidente reported last week that government owes five companies around N$98 million.

This includes N$25 million owed to the joint-venture between Italian civil construction company CMC and Otesa for the Windhoek-Okahandja road, and the N$22 million owed to Unik/Thohi for the Swakopmund-Walvis Bay dual carriageway.

According to the newspaper, Nexus is owed N$28 million for the Isize-Luhonono road in the Zambezi Region.

Chinese firm Zhong Mei is allegedly owed N$18.8 million for ongoing work on the Swakopmund-Henties Bay road.

The RFA determines and collects road user levies. This money is used to help pay for the rehabilitation and construction of roads by local authorities and the RA.

OGONE TLHAGE

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