No decision on Chinese financing

11 March 2019 | Transport

No decision has been made on who will finance the Hosea Kutako International Airport (HKIA) project, says transport minister John Mutorwa.

This contradicts earlier media reports that a financing deal had been agreed upon by the Namibian and Chinese governments.

Namibian Sun asked Mutorwa whether the government had decided to go the route of Chinese financing or whether a private investor would be allowed to operate the airport in a public-private partnership.

“Government is clear at policy level; the decision was taken some time back that Hosea Kutako International Airport needs an upgrade. It is still a work in progress on financing. The details will follow … this is still a work in progress,” Mutorwa said.

China had offered the government a sweetener when it proposed that the loan for the airport project would consist of a grant and an interest portion. The loan, state broadcaster NBC reported last year, would be worth N$2.6 billion and 2% interest would be charged; 10% of the loan would be in the form of a grant.

Finance minister Calle Schlettwein recently told a local newspaper that his ministry was leaning towards funding the airport project by getting a loan, instead of allowing a private company to build the airport.

“A public-private partnership will result in outsourcing the airport. Do we want to outsource our strategic asset to private companies? No,” he said. Schlettwein's comment was a clear indication that the government intended to get a loan from China to fund the airport project, the newspaper reported.

In December 2015, the Namibia Airports Company (NAC) awarded a N$6.8 billion tender for the airport project to a Chinese state-owned firm, Anhui Foreign Economic Construction Group.

President Hage Geingob subsequently cancelled the tender, citing irregularities in the manner it had been awarded. The finance ministry also said the tender had been awarded in contravention of the State Finance Act.

That led to running court battles, which ended with a Supreme Court ruling delivered in March last year, vindicating the head of state.

The World Bank recently advised the Namibian government to finance the planned airport upgrading on a public-private-partnership basis.

“A public-private partnership would allow for the required development and enhancement of the Hosea Kutako International Airport's infrastructure, while generating budget efficiencies and fiscal relief for government to sustain the rest of the airport network,” a World Bank report said.



OGONE TLHAGE

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