CHICO pre-financed road due to government debt

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Albertina Nakale

Windhoek-Due to the fact that the government was unable to honour its contractual obligation to pay China Henan International Cooperation Group (CHICO) an outstanding amount of N$290 million on time, the Chinese firm had to approach its headquarters in China for a financial bailout.

CHICO is a reputable multi-national company that has now been operating in Namibia for over a decade and is working on a multi-million road from Okondjatu to Okamatapati in Otjozondjupa Region.

In an interview with New Era yesterday over allegations the company has retrenched about 25 workers last week due to financial constraints, CHICO spokesperson Charles Cui denied this, saying CHICO has not retrenched any workers nor does it have any outstanding salary issues.

Some workers who preferred anonymity told New Era that CHICO management promised to reinstate the retrenched workers once the government had paid some of the money that it owed the Chinese firm.

However, they claimed that CHICO had failed to honour its promises to reinstate workers, despite the government having paid the company N$23 million last month.

They also allege that about 15 sub-contractors were sent packing because of the debt the government owes CHICO.

“They retrenched workers but they keep bringing in new ones. Why is this happening and what’s the logic behind it?” they claimed through a spokesperson.

In response Cui explained the company obtained financial assistance from its headquarters in China to avoid retrenching and or laying off any of its employees in Namibia.

Cui said no retrenchments were done at CHICO and no re-employment promises were consequently given to any employee whose contract duly expired, contrary to what workers are saying.

According to him, all terminations are done in accordance with the provisions of the Namibian Labour Act No. 11 of 2007.

For the current road projects from Otjinene to Grootfontein, he said no worker was retrenched, but he added the reduction of the workforce was due to the contracts of workers ending. He said that due to work being suspended as a result of the late payment from the government the need to renew contracts of workers whose contracts had ended was not necessary.

“It does not make sense to keep a large group of workers on site, while work has been suspended,” he said.

Cui said by the end of May 2017, the Roads Authority (RA) or its shareholder (government) still owed $254 million to CHICO.

He revealed that CHICO did not suspend the road project from Otjinene to Okamatapati due to the delayed payment as other contractors did at the end of last year and even this year.
“CHICO obtained financial assistance from the HQ (headquarters) in China and completed the project within the time frame, which means that CHICO committed itself and pre-financed the road independently,” he noted.

Since January 2017, Cui maintained, CHICO employees received their full remuneration to date, except for a four-day delay in May this year, which money was immediately paid after the N$23 million was received the same time in May from the government as part of its outstanding debts.

He stressed that to date the company has never retrenched employees due to salary payment issues, adding that their aim is to create and provide sustainable employment.
“To this end, our aim has been achieved thus far.”

CHICO is one of many contractors that are affected by the delayed payments by the government in the road construction industry.

He said the project currently underway from Okamatapati to Grootfontein is time bound, and understanding road construction, it is done section by section.

“This merely means that our employees are employed based on the section within which they have applied. Where a section has been completed, some employees are redeployed to other sections, while a few are automatically let go,” he explained.

He said that the standing time for plant, the time which was lost to complete the works, the labour cost to keep key personnel and general workers on site and overhead costs for the company are some of the major losses to CHICO.

“The only work for the road project from Okamatapati to Grootfontein which we are currently busy with is ancillary works, meaning small work which is not part of the critical path. We do this to keep our workers busy and not to lay off our key personnel. If work has to resume, then at least we still have our key team to finish the project,” Cui noted.

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