The shape ofNWR’s PPPs

The unwelcome news that Namibia Wildlife Resorts (NWR) will close its campsites in the West Coast Recreational Area for the coming summer holiday season have raised renewed concerns over the viability of the public-private partnerships (PPPs) it entered into as the panacea for its loss-making resorts. Asked why NWR allowed the campsites to fall into disrepair, it merely responded that it “did its part to ensure that everything was being followed accordingly”. “However, like with any arrangement, there is always room for improvement,” responded Mufaro Nesongano, manager of corporate communications at the parastatal. The popular campsites – Jakkalsputz, Mile 72, and Mile 108 – are to be closed for renovations. There have been sustained complaints from the public over the near collapse of infrastructure, even after private partners took over the management of the campsites in July 2008. Nesongano would not say how much each of the private investors have since invested in the resorts, and neither would he say what income the NWR has so far derived from these PPPs. “That is something we are not in a position to elaborate on,” was all Nesongano was prepared to say. Tungeni Investments The black economic empowerment (BEE) company Tungeni Investments, which got the lion’s share from the PPP concessions, in 2008 undertook to invest N$6.6 million in infrastructure development at Mile 72, Mile 108 and Jakkalsputz, for which it got seven-year management contracts. It was to pay a monthly lease of N$10 000 for each of the campsites. Its contract expired in August this year. In 2008 Tungeni also undertook to invest N$450 million in the refurbishment of the Von Bach resort near Okahandja, for which it got a 50-year concession. The agreement with NWR included a N$10 000 monthly rental of the property. When the revamped dam resort was inaugurated in October 2011, Tungeni announced that it had invested N$25 million in renovations and that it had created 20 permanent and 62 temporary jobs. It also announced that the lodge would be extended with a second phase that would include 22 self-catering bungalows as well as the Outjere Lifestyle Village development. The managing director of Tungeni, Iyaloo ya Nangolo, would not say this week how much the company has invested in all of its PPPs and would not respond to questions regarding the infrastructure at the coastal campsites. Prosperity Africa Mile 14 Sun Karros has taken over the concession for Mile 14 from Pisces Investment Holdings No 20, which got the initial 30-year-lease on the campsite in 2008 when it promised an investment of N$50 million and to pay a monthly rental of N$10 000. Rica Blaauw, the marketing manager of Sun Karros, this week said the arrangement regarding Mile 14 is not a PPP agreement, but a joint venture with NWR. Prosperity is making an immediate investment of N$1 million in the renovations currently taking place so that the camping facilities can open on December 9. The managing director of Prosperity, Bertus Struwig, said more investments in the renovation of Mile 14 will be made during 2016 to develop it into a prime camping and holiday destination if its phase two initiative is approved by NWR. According to Nesongano, it was decided to rope in Sun Karros to manage Mile 14 when it submitted a proposal. He said the NWR saw this as an “opportunity to work with them” since they were already managing the Daan Viljoen resort. Blaauw said groundwork at this campsite has already started and shower facilities are being installed. The company anticipates the completion of a minimum of 48 sites for the first phase of development that will be open this Christmas season. Twenty-four of these sites will each have a 220-volt power outlet. Sun Karros said there are will be new ablution facilities and hot showers. This camping facility has not been fully operational and hardly used in the last few years. Some years ago camping sites were severely damaged by high tides and were never restored. Nesongano would not say what has happened to the initial contract with Pisces, and advised that this company be contacted for comment. It, however, proved impossible to trace this company. Sun Karros Lifestyle Centre Daan Viljoen, now called the Sun Karros Lifestyle Centre, was leased to Prosperity Africa for 30 years with a N$25 000 monthly rent. Struwig said the company has so far invested N$50 million in the Daan Viljoen resort. Sun Karros, its subsidiary, has been managing the resort, and the company in 2012 indicated that it would invest a further N$30 million during a second phase of renovations. A third phase would involve the establishment of a medical tourism park with a spa and a wellness centre at a cost of N$15 million to N$18 million. All infrastructure has so far been redeveloped featuring a new reception building, four conference halls, one function hall, a large restaurant, 19 luxury bungalows, 12 camping sites with braai facilities, toilet and shower facilities. NWR’s annual income from Daan Viljoen is more than N$1.4 million. Reho Spa The Reho Spa is likely to open its bungalows for public use towards the end of December, said a member of the Rehoboth Community Trust, Alden Cloete. The trust signed a 12-year contract with NWR in November last year and had earlier indicated that it would invest N$10 million to refurbish the resort. Cloete said this week, however, that it needs an additional N$3 million to N$4 million to rebuild the swimming pool and spa area. Cloete said since the Reho Spa was closed in April 2011, it has been “plundered and stripped” of whatever infrastructure was locked in behind its fences despite the fact that the NWR had hired a security company to guard the property. The NWR had initially entered into a 20-year lease agreement with Reho Spa Resorts that indicated an investment of N$5 million. This company was to pay a monthly lease of N$10 000 for the use of the resort. Fuel stations DPF Energy & Minerals, which in 2008 got a 10-year lease to run NWR’s fuel stations at nine of its campsites, has in the meantime changed its name to Enercon Namibia. According to an employee at Enercon, Lovemore Mukandira, there was a change in the directorship and shareholding structure of the company. Mukandira said August 26 Holdings has 50% shareholding in Enercon and retired General James Awala is one of its directors. The general manager of Enercon Namibia, Henry Dames, could not elaborate on the changes that have taken place, saying it “predates” his appointment. Although Nesongano would not say what income the NWR had so far derived from these resorts, the initial PPP agreements stipulated that it would receive 10% of the yearly gross turnover of each of the resorts. The combined signing fees which NWR received in 2008 was N$7.4 million. The total investment promised by the private partners was N$552 million. On the future of the PPPs, Nesongano said: “As a company that is geared towards inclusivity and ensuring no Namibian is left out, we will continue evaluating the best way forward if we see an opportunity to work with a partner.” Initial rationale for the PPPs The decision to enter into PPPs was a result of a Cabinet-approved turnaround strategy in 2006 while Tobie Aupindi was the managing director. A Cabinet retreat in 2005 decided that PPPs in “non-core areas” would be approved. These PPPs were meant to attract investment into the identified resorts “with the rationale that by finding suitable partnerships, the burden of investment, redeployment and training of staff to meet industry service standards can be shared”. The NWR this way it could be “immediately relieved of the burden of absorbing losses” suffered at some of these facilities. In August 2007 NWR invited local and international investors interested in PPP arrangements for Reho Spa, Shark Island, the Von Bach campsite and the four coastal campsites. In its advertisement calling for submissions it made it clear that there would be no alienation of the facilities, which are all state-owned, and stated that the jobs of the NWR personnel then employed at those resorts would be safeguarded. The PPP awards were criticised for blatant bias towards businesspeople and companies with close ties to the ruling Swapo Party. Workers at Reho Spa, Daan Viljoen and Von Bach marched in protest a month after the PPPs were signed, claiming they were not consulted on the awards. The Swapo Party companies Kalahari Holdings and Zebra Holdings each have 10% shares in Sun Karros. Donar Investments, a company owned by the Swapo Youth League, has shares in Tungeni Investments. The Swapo youth league member Ralph Blaauw, was a partner in the Reho Spa Resorts. CATHERINE SASMAN