RCC/Chinese loan 'illegal'
The already-signed contract mooted as an attempt to save the RCC from closure is being challenged.
Minister of Finance Calle Schlettwein says legal provisions were “completely ignored” in the N$570 million loan agreement between the Road Construction Company (RCC) and Chinese firm Jiangsu Nantong Sanjian (Pty) Ltd.
Schlettwein confirmed his assertions made elsewhere that the contract was entered into illegally because necessary provisions, not only in the State Finance Act but also in the new Public Procurement Act, as well as the Public Private Partnership Act, were not adhered to.
Moreover, said Schlettwein on Wednesday, some of the road contracts stipulated in the loan agreement have not been budgeted for.
“We are obliged to act and we have therefore approached the attorney-general's office for advice. We have to do that when boards take negligent decisions,” Schlettwein said.
He said the contract, which has already been signed, will have to be set aside if proven it was entered into illegally.
“If there are financial implications then those responsible must be held accountable; there must be consequences,” Schlettwein said.
RCC board chairperson Fritz Jacobs is quoted as having said the loan agreement is a “self-sustaining solution which will not rely on government guarantees”.
He has also been quoted as having suggested the contract is an attempt to avert the closure of the RCC.
Sources said this would mean the Chinese company would, as a result, automatically qualify for road tenders.
This, Schlettwein said, would mean the loan agreement is a thinly veiled “purchase of contracts”.
Schlettwein also denied allegations that the finance ministry has ever withheld funds from the RCC, saying all funds for projects properly accounted for have been allotted.
He further denied he and public enterprises minister Leon Jooste want to close down the RCC, saying he had advocated instead for the revision of the parastatal.
“What we have here is an entity that needs to be bailed out on a monthly basis; it cannot even pay its workers' salaries.
The RCC's services to the state are also often more expensive than those offered by private companies. Here is an entity that costs the state. We need to review its management and how it is using public resources. At the moment it is not sustainable. But I have never said it must be closed,” Schlettwein said.
He also said any suggestion that he has a personal interest in the RCC's closure is simply malicious. Jacobs did not respond to questions sent to him and failed to respond to SMS messages or calls.
Jooste referred all questions to the works ministry which is still responsible for the RCC.
Works minister John Mutorwa, booked off sick, did not respond to questions by the time of going to press.
The status of the RCC remains uncertain as the RCC Judicial Management Bill – which is the first process to get the parastatal under judicial management as was proposed by the Cabinet Committee on Overall Policy and Priorities (CCOOPP) – is yet to be tabled.
Seeking funds
This is not the first time the RCC under Jacob's leadership has gone out to seek funding for the beleaguered parastatal.
The RCC in 2016 called for expressions of interest from private entities for its capital projects.
One private entity that did respond to this request was an unknown entity called TN Investments owned by Thomas Nakasole.
The former acting RCC CEO, Tino !Hanabeb, in a letter to Nakasole indicated the RCC would need more than N$5 billion for its project funding needs.
These projects, according to !Hanabeb's letter to Nakasole, included N$300 million for working capital, N$440 million for the replacement of the old RCC plant, N$161 million for a 245-kilometre Gobabis-Aminuis-Aranos road, N$321 million for a 105-kilometre road between Khorixas and Kamanjab, N$225 million for maintenance projects and N$90 million for an enterprise resource planning system.
It further includes N$800 million for the construction of a mixed-use RCC Plaza, N$900 million for a Waterfront and Marina Development at the port of Walvis Bay, and a request for N$2 billion in funding for “government roads construction projects”.
Catherine Sasman
Schlettwein confirmed his assertions made elsewhere that the contract was entered into illegally because necessary provisions, not only in the State Finance Act but also in the new Public Procurement Act, as well as the Public Private Partnership Act, were not adhered to.
Moreover, said Schlettwein on Wednesday, some of the road contracts stipulated in the loan agreement have not been budgeted for.
“We are obliged to act and we have therefore approached the attorney-general's office for advice. We have to do that when boards take negligent decisions,” Schlettwein said.
He said the contract, which has already been signed, will have to be set aside if proven it was entered into illegally.
“If there are financial implications then those responsible must be held accountable; there must be consequences,” Schlettwein said.
RCC board chairperson Fritz Jacobs is quoted as having said the loan agreement is a “self-sustaining solution which will not rely on government guarantees”.
He has also been quoted as having suggested the contract is an attempt to avert the closure of the RCC.
Sources said this would mean the Chinese company would, as a result, automatically qualify for road tenders.
This, Schlettwein said, would mean the loan agreement is a thinly veiled “purchase of contracts”.
Schlettwein also denied allegations that the finance ministry has ever withheld funds from the RCC, saying all funds for projects properly accounted for have been allotted.
He further denied he and public enterprises minister Leon Jooste want to close down the RCC, saying he had advocated instead for the revision of the parastatal.
“What we have here is an entity that needs to be bailed out on a monthly basis; it cannot even pay its workers' salaries.
The RCC's services to the state are also often more expensive than those offered by private companies. Here is an entity that costs the state. We need to review its management and how it is using public resources. At the moment it is not sustainable. But I have never said it must be closed,” Schlettwein said.
He also said any suggestion that he has a personal interest in the RCC's closure is simply malicious. Jacobs did not respond to questions sent to him and failed to respond to SMS messages or calls.
Jooste referred all questions to the works ministry which is still responsible for the RCC.
Works minister John Mutorwa, booked off sick, did not respond to questions by the time of going to press.
The status of the RCC remains uncertain as the RCC Judicial Management Bill – which is the first process to get the parastatal under judicial management as was proposed by the Cabinet Committee on Overall Policy and Priorities (CCOOPP) – is yet to be tabled.
Seeking funds
This is not the first time the RCC under Jacob's leadership has gone out to seek funding for the beleaguered parastatal.
The RCC in 2016 called for expressions of interest from private entities for its capital projects.
One private entity that did respond to this request was an unknown entity called TN Investments owned by Thomas Nakasole.
The former acting RCC CEO, Tino !Hanabeb, in a letter to Nakasole indicated the RCC would need more than N$5 billion for its project funding needs.
These projects, according to !Hanabeb's letter to Nakasole, included N$300 million for working capital, N$440 million for the replacement of the old RCC plant, N$161 million for a 245-kilometre Gobabis-Aminuis-Aranos road, N$321 million for a 105-kilometre road between Khorixas and Kamanjab, N$225 million for maintenance projects and N$90 million for an enterprise resource planning system.
It further includes N$800 million for the construction of a mixed-use RCC Plaza, N$900 million for a Waterfront and Marina Development at the port of Walvis Bay, and a request for N$2 billion in funding for “government roads construction projects”.
Catherine Sasman
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