Neckartal Dam-Government still has to pay N$2.6 billion towards the construction of the Neckartal Dam, despite the dam being 92 percent complete as of Monday this week.
This is according to the permanent secretary in the Ministry of Agriculture, Water and Forestry, Percy Misika, who spoke to the press during his visit to the construction site on Monday.
Briefing the media on progress of the dam, Misika said the cost of the dam has over the time almost doubled, and that government still needs to pay N$2.6 billion to the Italian contractor, Salini SpA.
He noted that the initial cost of the dam was set at N$3.02 billion, for both the main contractor and the engineering consultant, but government will now have to fork out almost twice that amount, as the cost had increased over time.
“Due to delays and cost escalations, the estimated total cost of the dam now stands at N$5.7 billion, of which N$3.121 billion has been paid, thus leaving a shortfall of N$2.6 billion.”
Misika said government is committed to honouring its payments and completing the project.
He informed the media that a technical committee set up to devise solutions to fund the project, has finalised its work. The committee has recommended that of the N$2.6 billion shortfall, N$600 million should be paid by Namwater, of which N$200 million will be sourced from their cash reserves, N$200 million raised through loans and N$200 million through bonds.
He explained that while Namwater will assist with the payments, the MAWF would pro-actively budget for the repayment of the monies to Namwater over a period of five years to ensure that their critical capital works are not affected.
He said the committee further recommended that N$155 million of the shortfall be paid by MAWF, while N$1.374 billion be sourced from government’s infrastructure fund. All due payments are to be made during the current financial year.
He indicated that once these huge amounts have been settled, a further shortfall of N$500 million will be budgeted for by the MWAF for the financial years 2018/19 and 2019/20 to settle all outstanding invoices.
Making his first visit to the dam since his appointment last year, Misika said the recommendations of the technical committee to the cabinet committee will now have to be approved by Cabinet to take effect.
On the overall progress of the construction of the dam, he said the dam is a very important project for //Kharas Region and the nation at large and although there have been challenges, he was happy with the progress. “Despite the challenges, we are happy with the progress of the construction of the dam,” he said.
He further said the dam is expected to be completed by April 2018, at which point it will be transferred to the control of Namwater.