NAC sued for millions

29 January 2019 | Justice

Consulting engineering firm Aurecon Namibia is suing the Namibia Airports Company (NAC) for millions of dollars it says it is owed for upgrades completed at the Ondangwa and Hosea Kutako International airports.

According to Aurecon, it is still owed more than N$15.7 million, which includes about N$3 million in outstanding VAT for services rendered at the two airports.

Aurecon originally sued the NAC for about N$21 million at the beginning of last year, but since then the airports company has made a payment of N$7.4 million. The lawsuit relates to consulting services provided by Aurecon in relation to phases zero and one of the northern airport upgrades, for which the firm says it is owed more than N$3.17 million in respect of VAT for services rendered during 2015 and 2016.

In the second claim, Aurecon wants the NAC to pay N$477 283 for additional consulting services on phases zero and one, and the Pavement Classification Number (PCN) calculation for Hosea Kutako, as well as interest calculated in terms of the agreement reached on 14 November 2016.

In its third claim, the engineering firm alleges it provided design work and supervisory services to the value of more than N$19.4 million, including VAT, for phases two and three of the Ondangwa facility.

The NAC made a payment of N$7.4 million to the company on 3 May last year, bringing the outstanding total to about N$12 million, plus interest that it is still owed.

Aurecon was contracted by the NAC to provide consulting services for the detailed design, site supervision and contract administration of the Ondangwa Airport pavement rehabilitation and upgrades.

The legal matter, which has been dragging on since last year, was scheduled before Judge Herman Oosthuizen for a pre-trial hearing.

Aurecon, in its particulars of claim, alleged that they entered into a written “contract for consulting services” with the NAC, which was represented by its former CEO Tamer El-Kallawi.

The NAC allegedly agreed to pay Aurecon for the services rendered, amounting to 10% of the project's construction costs, excluding VAT. The amount accrued interest at the prime lending rate determined by the Bank of Namibia (BoN).

Aurecon director Johan Kaber said in his witness statement the parties agreed that Aurecon would provide consulting services for the detailed design, site supervisions and contract administration of the Ondangwa Airport pavement rehabilitation and upgrades.

Kaber says the NAC had not applied for a VAT exemption and “not once did the NAC object or indicate that VAT should not be added” to their invoices.

Aurecon maintained the NAC is obliged to pay them on the presentation of invoices within 30 days of the receipt of each invoice, and that a failure to do so would accrue interest at the prime rate.

“The NAC did not obtain an exemption from VAT for this project and consequently VAT is payable on the amount,” Aurecon argued in terms of the over N$3 million being claimed as a VAT payment. The consulting services for the Hosea Kutako airport were reportedly at a special instance and on request by the NAC during March 2015 to October 2016.

“Despite demand, the NAC has neglected to pay Aurecon the said amount, which is due and payable,” the engineering firm alleged.

Aurecon further said it had complied with all its obligations under the agreement.

According to the firm, the NAC was represented by its former engineering executive, Courage Silombela, who on 7 June 2017 acknowledged in writing the parastatal's indebtedness to Aurecon in the amount of N$20 434 986.

Meanwhile, the NAC said in its plea document that it agreed to pay Aurecon 10% of the construction costs, which amounts to about N$21 million. However, the NAC denied that the amount would be excluding VAT.


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