Namibia: Construction Firm Takes On Roads Authority

A local construction company has threatened to sue the Roads Authority (RA) if it does not immediately address issues it has with the manner in which the entity is making payments directly into the account of its Chinese joint venture partner for a road construction contract.

Onamangongwa Trading Enterprises and the Chinese firm China Railway Seventh Group are currently embroiled in a dispute over the joint venture for the construction of the Windhoek – Hosea Kutako International Airport dual carriageway Phase 1. The contract is worth nearly N$800 million.

The two companies signed the agreement in November 2015 whereby Onamangongwa holds a 20% stake in the joint venture. The agreement makes provision that all payments due in respect of the contract are to be paid into the joint venture bank account and not into the individual two partners’ accounts.

They further claim that since the commencement of the project, and despite protests by them, RA CEO Conrad Lutombi has approved payments due and owing the joint venture for works done, directly to the Chinese firm, as opposed to the agreement.

According to a letter of demand addressed to Lutombi by lawyer Henry Shimutikweni on behalf of Onamangongwa, the local company has been unable to obtain details of payments made directly to the Chinese firm and all payments certificates issued. The company says it estimates that the amounts paid directly to the Chinese are more than N$700 million and that it is important to note that the indirect majority shareholder of the Chinese firm is the Chinese State through China Railway Engineering Corporation. They further say that they have always protested these direct payments to the Chinese firm, but Lutombi has continued with same for reasons unknown to them.

According to Onamangongwa they received a letter from the RA in March this year in which they purportedly sought clarity as to whether the account the payments was made to is that of the joint venture, to which they replied in the negative, yet RA continued to make payments to that account. The letter to the RA further states that the CEO has on numerous occasions acted in a manner which is indicative of an intention to exclude Onamangongwa from the activities of the agreement and project.

“Our client’s instruction is therefore to inform you that your conduct indicates that from the onset you misrepresented your intention to enter into an agreement with the joint venture and that the real intention was to enter into an agreement with China Railway Seventh Group,” the letter of demand states.

“In the event that there is no misrepresentation by yourself as aforementioned, our client contends that your actions constitute a breach of the agreement entered into between yourself and the joint venture, and by extension our client.”

It went on to say that Onamangongwa views the conduct of Lutombi as reprehensible and a direct result of the damages suffered by them. Furthermore, the letter says, Onamangongwa has instructed Shimutwikweni to investigate whether the conduct of the RA as an institution and Lutombi in his personal capacity have violated any of the procurement laws of Namibia, including related to governance of state-owned enterprises. They further demanded the CEO furnish them copies of payment certificates submitted to the RA by the joint venture and or China Railway Seventh Group, details of all payments made in respect of the project and copies of all deviations and or extensions that may have been granted in respect of the project, failing which they hold instructions to immediately seek appropriate legal redress in respect of the violations and damages referred to in the letter. Lutombi was not available for comment and the legal officer of the RA, Chris Mayubelo, said he is not at liberty to comment and will in any case deal with lawyers of Onamangongwa directly and not through the media.

Source: New Era

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