Government will not buy the Areva desalination plant at the west coast due to the high asking price of N$3 billion, agriculture minister John Mutorwa announced.
Cabinet, through its treasury committee, has been studying a proposal to buy the plant, owned by French uranium mining giant, Areva.
Mutorwa, who was addressing stakeholders in Swakopmund yesterday, said that Cabinet was interested in acquiring the plant but its treasury committee – after vigorous scrutiny – advised otherwise.
“Financial experts took a closer look at the financial side of the deal and came up with a report. Based on that report, government decided that we are not going to pursue the business of buying, on the basis of those figures,” the minister explained.
The N$3 billion plant was offered for purchase to government by Areva.
Mutorwa maintained that government’s relationship with Areva will not be affected by the decision and negotiations will still continue through NamWater.
“We are still talking on what is next. I don’t want to be irresponsible but we will construct our own desalination plant through a public-private-partnership. We are also not saying that the Areva desalination plant is not needed as there is a broader scope,” the minister said.
He then explained that plans for government’s own desalination plant were already in the pipeline since 2008.
“There was already a plan from NamWater to explain to the then leadership the water situation at the coast and what will happen if certain steps are not taken.”
“It was explained that if nothing is done by 2015 we will find ourselves in a predicament, and truly we are finding ourselves in this situation,” the minister said.
He added that a national desalination taskforce was set up to spearhead the project. Tenders in this respect were called, the minister said.
According to Mutorwa, none of the tenderers was qualified enough for the task and the project was stalled whilst government in the meantime started to negotiate with Areva for the supply of water until government set up its own plant.