Neckartal costs balloon by N$2.7b
Namibia's largest dam has become by far the most costly with total expenses increasing to N$5.7 billion and government must make a plan to pay the bills.
NamWater has agreed to make N$600 million available towards settling part of government's debt on the Neckartal Dam project.
This will be in the form of a loan that will have to be paid back with interest by the agriculture ministry to the parastatal.
The reimbursement will be done over a five-year period, starting in the 2018/19 financial year, agriculture permanent secretary Percy Misika said.
Misika toured the dam on Monday and in a media briefing afterwards gave revised figures and payment plans for the project's total debt.
The initial contract amount of N$3.02 billion for both the contractor, Salini Impregilo and engineering consultant, Knight Piésold, now stands at just over N$5.7 billion due to delays and cost escalations.
Government already paid N$3.121 billion, leaving a shortfall of N$2.6 billion.
In September, NamWater advanced N$200 million of its loan amount from its own reserves to help kick-start production halted at the dam in August due to non-payment.
The ministry added N$155 million, Misika said.
NamWater will obtain the remaining N$400 million through a bank loan and bond, he added.
Of the total project debt, a further N$1.374 billion will be sourced from the Infrastructure Fund which, according to Misika, is in the process of being set up by the finance ministry.
“The final shortfall of N$500 million for the financial years 2018/19 and 2019/20 will have to be budgeted for by the ministry during 2018/19 and 2019/20,” he said.
These recommendations were made by a technical committee set up in recent months by the Cabinet Committee on Treasury to deal with the financing needs of Neckartal. It awaits approval from the full Cabinet.
The dam will be transferred onto the NamWater balance sheet upon completion.
The parastatal and ministry diverted funds that were budgeted for other strategic projects to Neckartal to avert more costs and delays, the PS said.
“Progress on the construction works of the dam stands at 92% and it is estimated that completion will be around April 2018 with a further retention period of a year.”
The plan is for the retention fee (N$500 million), which is about 10% of the total project value, to be disbursed during the 2018/19 and 2019/2020 financial years.
NAMPA
This will be in the form of a loan that will have to be paid back with interest by the agriculture ministry to the parastatal.
The reimbursement will be done over a five-year period, starting in the 2018/19 financial year, agriculture permanent secretary Percy Misika said.
Misika toured the dam on Monday and in a media briefing afterwards gave revised figures and payment plans for the project's total debt.
The initial contract amount of N$3.02 billion for both the contractor, Salini Impregilo and engineering consultant, Knight Piésold, now stands at just over N$5.7 billion due to delays and cost escalations.
Government already paid N$3.121 billion, leaving a shortfall of N$2.6 billion.
In September, NamWater advanced N$200 million of its loan amount from its own reserves to help kick-start production halted at the dam in August due to non-payment.
The ministry added N$155 million, Misika said.
NamWater will obtain the remaining N$400 million through a bank loan and bond, he added.
Of the total project debt, a further N$1.374 billion will be sourced from the Infrastructure Fund which, according to Misika, is in the process of being set up by the finance ministry.
“The final shortfall of N$500 million for the financial years 2018/19 and 2019/20 will have to be budgeted for by the ministry during 2018/19 and 2019/20,” he said.
These recommendations were made by a technical committee set up in recent months by the Cabinet Committee on Treasury to deal with the financing needs of Neckartal. It awaits approval from the full Cabinet.
The dam will be transferred onto the NamWater balance sheet upon completion.
The parastatal and ministry diverted funds that were budgeted for other strategic projects to Neckartal to avert more costs and delays, the PS said.
“Progress on the construction works of the dam stands at 92% and it is estimated that completion will be around April 2018 with a further retention period of a year.”
The plan is for the retention fee (N$500 million), which is about 10% of the total project value, to be disbursed during the 2018/19 and 2019/2020 financial years.
NAMPA
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