RCC N$5 billion request not untoward – !Hanabeb
The head of the parastatal says it has only expressed its funding needs.
The acting CEO of the Roads Contractor Company (RCC), Tino !Hanabeb, says there is nothing untoward about a proposal to private entities for funding of the parastatal's capital projects.
Questions were raised about a financing request to an obscure company called TN Investment in which !Hanabeb in April 2016 wrote that the RCC would require a whopping N$5.237 billion for a number of envisaged projects.
He enumerated that the money would be required for working capital (N$300 million), N$440 million for the replacement of an old plant, N$161 million for the 245-kilometre Gobabis-Aminius-Aranos road, N$321 million for the 105-kilometre Khorixas-Kamanjab road, 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, as well as a request for N$2 billion funding of “government roads construction projects”.
!Hanabeb said the letter to Thomas Nakasole was simply indicating the RCC's project funding needs. He said this is what the parastatal does each time it approaches various providers for funding.
“My office receives offers for funding/partnerships, on a weekly basis. Therefore, RCC's correspondence with TN Investment was simply to understand [its] offer and for the same to be submitted to the RCC board and the shareholder (Namibian government.) In this case we did not process and/or submit (the) TN Investment proposal to the board of directors,” !Hanabeb said.
He said TN Investment had expressed interest to provide funding to the struggling RCC in February 2016.
!Hanabeb has recently in a communiqué to the RCC staff, stated that the RCC issued an expression of interest for funding in June 2016.
Funding was sought for asset and plant funding, specific project funding, property development funding and an item called balance sheet restructuring.
Companies that responded to this request were jointly made by a company called Red Bull CC and the Development Bank of South Africa, as well as by Lexna Incorporated in partnership with Sasari Co. Ltd & Winthorpe, and Development Bank of Namibia (DBN).
The RCC board has approved a N$36 million funding proposal from the DBN, which will be used for project-based finance on a mass urban land servicing project at Goreangab Extension 1 in Windhoek.
!Hanabeb said the RCC has not taken any loan from TN Investment.
Questions
Sources preferring anonymity claimed the government has not approved the 105-kilometre Khorixas-Kamanjab road for which !Hanabeb in his April 2016 letter to Nakasole said they would require N$321 million.
Asked about this, !Hanabeb stated that the RCC was awarded phase 1 of the Swakopmund-Henties Bay-Uis-Khorixas-Kamanjab road in June 2015.
“The award of the subsequent phases was subject to good performance on phase 1. The second phase was formally awarded from Khorixas to Kamanjab was awarded to RCC [sic],” said !Hanabeb, adding that details of this are available at the RCC.
He said the RCC Plaza project commenced in 2012 and a pre-feasibility study was completed in 2013.
“We are simply reviewing and implementing the project which our predecessors started. The project will immediately improve the RCC balance sheet,” !Hanabeb said. “RCC has 53 erven across Namibia, some with buildings, others not. This land and buildings are in various towns and the RCC is paying rates and taxes in places where it does not have operations. The objective is to turn the cost centres into revenue centres and through that reduce the high overhead costs.”
As far as the waterfront and marina development at the port at Walvis Bay goes, !Hanabeb said the RCC was approached for a partnership for the construction of this project even though it did not tender when it was advertised by Namport in 2015.
!Hanabeb further denied that the RCC has requested N$2 billion funding for “government roads construction projects” as he has stipulated in his letter to Nakasole.
This request has raised eyebrows among industry players who said funders are usually requested to provide a 10% guarantee on individual road projects.
!Hanabeb responded to the assumption: “RCC considers funding options for government roads awarded to it for construction and maintenance. This is to acquire plant and for working capital. Working capital is required as payments are done only after 56 days for bitumen standard roads and hence the need for four months' working capital.”
He added that the RCC primarily relied on its joint venture partners for the provision of working capital to “reduce the heavy reliance on joint venture partners”.
Catherine Sasman
Questions were raised about a financing request to an obscure company called TN Investment in which !Hanabeb in April 2016 wrote that the RCC would require a whopping N$5.237 billion for a number of envisaged projects.
He enumerated that the money would be required for working capital (N$300 million), N$440 million for the replacement of an old plant, N$161 million for the 245-kilometre Gobabis-Aminius-Aranos road, N$321 million for the 105-kilometre Khorixas-Kamanjab road, 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, as well as a request for N$2 billion funding of “government roads construction projects”.
!Hanabeb said the letter to Thomas Nakasole was simply indicating the RCC's project funding needs. He said this is what the parastatal does each time it approaches various providers for funding.
“My office receives offers for funding/partnerships, on a weekly basis. Therefore, RCC's correspondence with TN Investment was simply to understand [its] offer and for the same to be submitted to the RCC board and the shareholder (Namibian government.) In this case we did not process and/or submit (the) TN Investment proposal to the board of directors,” !Hanabeb said.
He said TN Investment had expressed interest to provide funding to the struggling RCC in February 2016.
!Hanabeb has recently in a communiqué to the RCC staff, stated that the RCC issued an expression of interest for funding in June 2016.
Funding was sought for asset and plant funding, specific project funding, property development funding and an item called balance sheet restructuring.
Companies that responded to this request were jointly made by a company called Red Bull CC and the Development Bank of South Africa, as well as by Lexna Incorporated in partnership with Sasari Co. Ltd & Winthorpe, and Development Bank of Namibia (DBN).
The RCC board has approved a N$36 million funding proposal from the DBN, which will be used for project-based finance on a mass urban land servicing project at Goreangab Extension 1 in Windhoek.
!Hanabeb said the RCC has not taken any loan from TN Investment.
Questions
Sources preferring anonymity claimed the government has not approved the 105-kilometre Khorixas-Kamanjab road for which !Hanabeb in his April 2016 letter to Nakasole said they would require N$321 million.
Asked about this, !Hanabeb stated that the RCC was awarded phase 1 of the Swakopmund-Henties Bay-Uis-Khorixas-Kamanjab road in June 2015.
“The award of the subsequent phases was subject to good performance on phase 1. The second phase was formally awarded from Khorixas to Kamanjab was awarded to RCC [sic],” said !Hanabeb, adding that details of this are available at the RCC.
He said the RCC Plaza project commenced in 2012 and a pre-feasibility study was completed in 2013.
“We are simply reviewing and implementing the project which our predecessors started. The project will immediately improve the RCC balance sheet,” !Hanabeb said. “RCC has 53 erven across Namibia, some with buildings, others not. This land and buildings are in various towns and the RCC is paying rates and taxes in places where it does not have operations. The objective is to turn the cost centres into revenue centres and through that reduce the high overhead costs.”
As far as the waterfront and marina development at the port at Walvis Bay goes, !Hanabeb said the RCC was approached for a partnership for the construction of this project even though it did not tender when it was advertised by Namport in 2015.
!Hanabeb further denied that the RCC has requested N$2 billion funding for “government roads construction projects” as he has stipulated in his letter to Nakasole.
This request has raised eyebrows among industry players who said funders are usually requested to provide a 10% guarantee on individual road projects.
!Hanabeb responded to the assumption: “RCC considers funding options for government roads awarded to it for construction and maintenance. This is to acquire plant and for working capital. Working capital is required as payments are done only after 56 days for bitumen standard roads and hence the need for four months' working capital.”
He added that the RCC primarily relied on its joint venture partners for the provision of working capital to “reduce the heavy reliance on joint venture partners”.
Catherine Sasman
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