No action on ballooning budget for oil storage
Cabinet secretary George Simataa says any steps to be taken will be subject to the findings of a review being done.
CATHERINE SASMAN
Cabinet secretary George Simataa and Anti-Corruption Commission (ACC) director Paulus Noa are accused of not taking steps against possible fraud on the national oil-storage facility project.
The Villager of 3 – 9 March reported that attorney-general Sackey Shanghala had instructed Simataa in September to suspend and charge the permanent secretary of the Namibian Planning Commission (NPC), Leevi Hungamo, over the ballooning budget of the oil-storage facility being built at Walvis Bay.
The Villager also reported that Shanghala had requested Noa in December to investigate potential corruption in the project.
Shanghala reportedly also requested Noa to probe Vaino Nghipondoka and his Babyface Civils company, which is building the storage facility in a joint venture with China Harbour Engineering Company (CHEC).
Noa yesterday denied that any case of corruption had been lodged with the ACC.
“I do not have a letter from the AG,” insisted Noa.
Last Friday, Simataa did not deny that Shanghala had instructed him to take action against Hungamo but said any steps to be taken would be subject to the findings of a review being done by Shanghala’s office.
He said Shanghala had prepared a number of reports on the project and the government had been briefed about its funding structure and the financial implications of that.
Simataa said it was agreed to engage the stakeholders in order to limit any further “financial exposure” for the government.
“Similarly, government also agreed that procedures that were used in awarding the oil-storage tender be reviewed in order to verify if there were any possible deviations. Should such a review show that there were deviations in procedures, such matter will be dealt with in terms of the existing law,” said Simataa.
He added that there was not yet any decision on the next course of action “in compliance with our constitutional provisions”.
Shanghala said his office had no authority to instruct either the cabinet secretary or the ACC. He also said that if his office had received instructions, he would not discuss that with the media.
Ballooning budget
Around 2008 and 2009 the National Petroleum Corporation of Namibia (Namcor) initiated the idea to build an oil-storage facility to penetrate the petroleum supply market.
Namcor since 2003 had a 50% import mandate, which in 2010 was revoked by former minister of mines and energy Isak Katali. Namcor, which then had a supply agreement with Glencore, had incurred major losses and was technically bankrupt.
Today all petroleum products are again imported by private oil companies.
By 2010 Namcor had drawn up the design of the fuel-storage facility, had completed a full environmental impact assessment and finalised the prequalification of tenders.
The cost of the project was pegged at N$800 million in 2010. It was then also estimated that the project would have been completed in 2012.
The project is now scheduled for completion by the middle of this year. What has raised concern, however, is that the estimated cost had ballooned to more than N$3 billion by 2013, and then to N$4.5 billion by 2014, and is now estimated at N$5.5 billion.
“This unexplained rise in the cost of this project is just criminal,” commented a source close to the project, who preferred anonymity.
“There is no way that the cost for the same thing could have gone up like that. The project at the start was cost effective. What has since happened in the configuration of the project that it has ballooned to N$5.5 billion?
“Why can they not open the books? It is the taxpayers’ money that is paying for the project; people need to know what components we are paying for. Previously the bill of quantities and everything else were worked out; even quotations for companies that had tendered were there. After that, there appears to be nothing. One only hears numbers.”
One of the reasons earlier suggested for the price escalation was that the design had changed from being a facility for crude oil to a storage facility for different petroleum products like petrol, diesel, and paraffin.
The National Planning Commission (NPC), to which the project was handed over, referred all questions to the energy ministry.
The ministry by the time of going to press had not yet responded to questions put to it.
Cabinet secretary George Simataa and Anti-Corruption Commission (ACC) director Paulus Noa are accused of not taking steps against possible fraud on the national oil-storage facility project.
The Villager of 3 – 9 March reported that attorney-general Sackey Shanghala had instructed Simataa in September to suspend and charge the permanent secretary of the Namibian Planning Commission (NPC), Leevi Hungamo, over the ballooning budget of the oil-storage facility being built at Walvis Bay.
The Villager also reported that Shanghala had requested Noa in December to investigate potential corruption in the project.
Shanghala reportedly also requested Noa to probe Vaino Nghipondoka and his Babyface Civils company, which is building the storage facility in a joint venture with China Harbour Engineering Company (CHEC).
Noa yesterday denied that any case of corruption had been lodged with the ACC.
“I do not have a letter from the AG,” insisted Noa.
Last Friday, Simataa did not deny that Shanghala had instructed him to take action against Hungamo but said any steps to be taken would be subject to the findings of a review being done by Shanghala’s office.
He said Shanghala had prepared a number of reports on the project and the government had been briefed about its funding structure and the financial implications of that.
Simataa said it was agreed to engage the stakeholders in order to limit any further “financial exposure” for the government.
“Similarly, government also agreed that procedures that were used in awarding the oil-storage tender be reviewed in order to verify if there were any possible deviations. Should such a review show that there were deviations in procedures, such matter will be dealt with in terms of the existing law,” said Simataa.
He added that there was not yet any decision on the next course of action “in compliance with our constitutional provisions”.
Shanghala said his office had no authority to instruct either the cabinet secretary or the ACC. He also said that if his office had received instructions, he would not discuss that with the media.
Ballooning budget
Around 2008 and 2009 the National Petroleum Corporation of Namibia (Namcor) initiated the idea to build an oil-storage facility to penetrate the petroleum supply market.
Namcor since 2003 had a 50% import mandate, which in 2010 was revoked by former minister of mines and energy Isak Katali. Namcor, which then had a supply agreement with Glencore, had incurred major losses and was technically bankrupt.
Today all petroleum products are again imported by private oil companies.
By 2010 Namcor had drawn up the design of the fuel-storage facility, had completed a full environmental impact assessment and finalised the prequalification of tenders.
The cost of the project was pegged at N$800 million in 2010. It was then also estimated that the project would have been completed in 2012.
The project is now scheduled for completion by the middle of this year. What has raised concern, however, is that the estimated cost had ballooned to more than N$3 billion by 2013, and then to N$4.5 billion by 2014, and is now estimated at N$5.5 billion.
“This unexplained rise in the cost of this project is just criminal,” commented a source close to the project, who preferred anonymity.
“There is no way that the cost for the same thing could have gone up like that. The project at the start was cost effective. What has since happened in the configuration of the project that it has ballooned to N$5.5 billion?
“Why can they not open the books? It is the taxpayers’ money that is paying for the project; people need to know what components we are paying for. Previously the bill of quantities and everything else were worked out; even quotations for companies that had tendered were there. After that, there appears to be nothing. One only hears numbers.”
One of the reasons earlier suggested for the price escalation was that the design had changed from being a facility for crude oil to a storage facility for different petroleum products like petrol, diesel, and paraffin.
The National Planning Commission (NPC), to which the project was handed over, referred all questions to the energy ministry.
The ministry by the time of going to press had not yet responded to questions put to it.
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