RCC has no confidence in board
The future of the parastatal, its players and projects remain in the balance as questions stack up over ‘pie in the sky’ schemes.
CATHERINE SASMAN
Staff at the Road Construction Company (RCC) reportedly lodged a vote of no confidence in the entire board and its former CEO Tino !Hanabeb in the middle of last month.
Insiders speaking on condition of anonymity said the vote of no confidence was registered with the minister of public enterprises, Leon Jooste, who was requested to open an investigation into numerous cases of alleged misconduct by !Hanabeb and the board.
Worrying, said the insiders, are the alleged attempts at ‘underhanded deals’ and ‘pie in the sky’ projects purportedly conjured up by the board chaired by Fritz Jacobs, !Hanabeb and their alleged ‘cronies’.
Some of these projects were mentioned in a letter !Hanabeb had written to little-known company TN Investments of Thomas Nakasole, in which he requested funding of more than a N$5.2 billion.
The items !Hanabeb requested funding for included N$800 million for the construction of a ‘mixed-use RCC Plaza’, N$900 million for a waterfront and marina development at the Walvis Bay port and N$2 billion for road construction projects.
Insiders, in their complaint to Jooste, reportedly also claimed victimisation, spying on the IT system of the RCC, alleged shenanigans on the Swakopmund to Henties Bay road construction project, as well as the yet-to-be-cabinet-approved construction of the Uis to Kamanjab road.
When approached for comment Jooste would neither confirm nor deny the claim that RCC staff had adopted a vote of no confidence in the RCC board.
It is, however, understood that the public enterprises ministry is contemplating an investigation into the affairs of the RCC.
!Hanabeb has since been replaced by Seth Herunga, who is to act in the CEO’s position until further notice.
Rumours in the RCC corridors are that the board will be disbanded. This, however, could not be confirmed.
RCC PLAZA
In the meantime, information was leaked on a ‘terms of engagement’ agreement clinched between the RCC and a company called Lithon Developers (Pty) Limited on the proposed RCC Plaza, which is to be built at the site of the RCC’s head office in Windhoek.
According to the leaked information the RCC entered into a tender process in 2012 to come up with a concept for a ‘development approach’ for the Plaza’s master plan and property development and associated relocation of some of the RCC’s mandated activities.
Lithon was reportedly “reappointed” on 4 November 2016 “to proceed with the development and implementation of the project as per concept developed in 2012”.
On 4 November 2016, !Hanabeb wrote a letter to Barnabas Uugwanga, director of business development of Lithon in which he said Lithon would have to appoint a broad-based team that “reflects Namibian diversity” for the implementation of the RCC Plaza project.
He wrote that RCC and Lithon would enter into a development agreement which stipulates the terms and conditions and scope of the project. Lithon was to develop a draft implementation plan within seven days of receipt of that letter.
Lithon was then to prepare the project terms of reference and engagement and then enter into a development agreement for the implementation thereof.
In the ‘terms of engagement’ the RCC indicated that there is ‘no budget’ but it stipulates that Lithon through its property development company, Lithon Developers, would take up 22.5% shares in the special purpose vehicle (SPV) set up for the joint venture.
The remaining 77.5% of the shares would be owned by RCC and part would be used to raise further capital for the development by selling shares to investors.
“RCC must retail at least 32.5% of the development by selling up to 45% through the development process lead [sic] by Lithon,” the terms of engagement reads.
An estimation was that RCC would ‘through this exercise’ receive up to N$43.65 million in the next eight months for the sale of the 45% of the property before construction would commence, which would “improve its [RCC’s] asset value after construction by at least N$390 million through its retention of 32.5% in the overall development, at N$1.2 billion development value”.
“Total value for RCC is N$433.65 million,” the master plan concluded.
Another option considered was that shares be sold in the SPV by RCC after the state land had been rezoned and services installed.
“The improvements could go as far as selling on a plot and plan option,” the master plan suggested. The total value of this second option would reportedly have generated N$475 million for the RCC.
“However, if RCC holds their shares and develop fully without selling, the share value will be N$930 million,” the plan stated.
Asked whether the RCC Plaza project would go ahead, minister Jooste responded: “Well, that all depends on whether the RCC goes ahead.”
Staff at the Road Construction Company (RCC) reportedly lodged a vote of no confidence in the entire board and its former CEO Tino !Hanabeb in the middle of last month.
Insiders speaking on condition of anonymity said the vote of no confidence was registered with the minister of public enterprises, Leon Jooste, who was requested to open an investigation into numerous cases of alleged misconduct by !Hanabeb and the board.
Worrying, said the insiders, are the alleged attempts at ‘underhanded deals’ and ‘pie in the sky’ projects purportedly conjured up by the board chaired by Fritz Jacobs, !Hanabeb and their alleged ‘cronies’.
Some of these projects were mentioned in a letter !Hanabeb had written to little-known company TN Investments of Thomas Nakasole, in which he requested funding of more than a N$5.2 billion.
The items !Hanabeb requested funding for included N$800 million for the construction of a ‘mixed-use RCC Plaza’, N$900 million for a waterfront and marina development at the Walvis Bay port and N$2 billion for road construction projects.
Insiders, in their complaint to Jooste, reportedly also claimed victimisation, spying on the IT system of the RCC, alleged shenanigans on the Swakopmund to Henties Bay road construction project, as well as the yet-to-be-cabinet-approved construction of the Uis to Kamanjab road.
When approached for comment Jooste would neither confirm nor deny the claim that RCC staff had adopted a vote of no confidence in the RCC board.
It is, however, understood that the public enterprises ministry is contemplating an investigation into the affairs of the RCC.
!Hanabeb has since been replaced by Seth Herunga, who is to act in the CEO’s position until further notice.
Rumours in the RCC corridors are that the board will be disbanded. This, however, could not be confirmed.
RCC PLAZA
In the meantime, information was leaked on a ‘terms of engagement’ agreement clinched between the RCC and a company called Lithon Developers (Pty) Limited on the proposed RCC Plaza, which is to be built at the site of the RCC’s head office in Windhoek.
According to the leaked information the RCC entered into a tender process in 2012 to come up with a concept for a ‘development approach’ for the Plaza’s master plan and property development and associated relocation of some of the RCC’s mandated activities.
Lithon was reportedly “reappointed” on 4 November 2016 “to proceed with the development and implementation of the project as per concept developed in 2012”.
On 4 November 2016, !Hanabeb wrote a letter to Barnabas Uugwanga, director of business development of Lithon in which he said Lithon would have to appoint a broad-based team that “reflects Namibian diversity” for the implementation of the RCC Plaza project.
He wrote that RCC and Lithon would enter into a development agreement which stipulates the terms and conditions and scope of the project. Lithon was to develop a draft implementation plan within seven days of receipt of that letter.
Lithon was then to prepare the project terms of reference and engagement and then enter into a development agreement for the implementation thereof.
In the ‘terms of engagement’ the RCC indicated that there is ‘no budget’ but it stipulates that Lithon through its property development company, Lithon Developers, would take up 22.5% shares in the special purpose vehicle (SPV) set up for the joint venture.
The remaining 77.5% of the shares would be owned by RCC and part would be used to raise further capital for the development by selling shares to investors.
“RCC must retail at least 32.5% of the development by selling up to 45% through the development process lead [sic] by Lithon,” the terms of engagement reads.
An estimation was that RCC would ‘through this exercise’ receive up to N$43.65 million in the next eight months for the sale of the 45% of the property before construction would commence, which would “improve its [RCC’s] asset value after construction by at least N$390 million through its retention of 32.5% in the overall development, at N$1.2 billion development value”.
“Total value for RCC is N$433.65 million,” the master plan concluded.
Another option considered was that shares be sold in the SPV by RCC after the state land had been rezoned and services installed.
“The improvements could go as far as selling on a plot and plan option,” the master plan suggested. The total value of this second option would reportedly have generated N$475 million for the RCC.
“However, if RCC holds their shares and develop fully without selling, the share value will be N$930 million,” the plan stated.
Asked whether the RCC Plaza project would go ahead, minister Jooste responded: “Well, that all depends on whether the RCC goes ahead.”
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