WINDHOEK – After advice from the attorney general and following a high-level inter-ministerial meeting that was chaired by Prime Minister Saara Kuugongelwa-Amadhila, the government has invalidated the multi-billion construction deal signed between public enterprise Roads Contractor Company (RCC) and Jiangsu Nantong Sanjian.
The high-level meeting that resulted in the multi-billion deal being declared invalid and legally unenforceable was attended by the ministers of works and transport, finance and public enterprises.
The deal would have given a lease of life to the besieged RCC with Chinese funding of N$580 million.
The latest twist was revealed yesterday by John Mutorwa, the Minister of Works and Transport, who said the agreement, titled ‘Funding and Technical Support Agreement,’ was concluded without prior input from the ministry of works and without legal advice from the attorney general.
At a media briefing in the capital, Mutorwa also did not rule out the possibility of disciplinary action against some individuals involved in the agreement, which would have granted RCC a capital injection of over half a billion Namibia dollars (N$580 million) in exchange for partnering with the Chinese company in road projects worth over N$2 billion.
The now invalidated partnership was intended to last for 14 years and had a five-year repayment period at 15 percent interest per year. The agreement further allowed the Chinese company to participate in RCC projects for five years after the long-term partnership concluded and made provision for Jiangsu Nantong Sanjian to become RCC’s major partner in road construction projects.
“The RCC board was already officially notified to formally inform Nantong that the 9 April 2018 agreement is invalid and unenforceable in law and that the purported contractual relationship between RCC and Nantong immediately ceases,” said Mutorwa. He added that the RCC board was already formally directed not to implement, or take any steps in accordance with, the agreement.
At yesterday’s briefing Mutorwa outlined the exact chronology of the controversial agreement and noted that he only became aware of it on April 20, 11 days after the signing.
“On 26 April 2018, the line minister (Mutorwa) convened an emergency meeting in the Ministry of Works and Transport’s boardroom, with the RCC’s board of directors and the RCC’s management members on the matter. After the meeting, on the same day, 26 April 2018, the line minister wrote a formal letter to the attorney general seeking his legal advice and legal opinion on the said agreement, albeit belatedly,” said Mutorwa.
He also reassured RCC employees that it is business as usual at the company and that they should not panic but allow the government to thoroughly investigate the matter.
“If there are any agreements that are irregular, then those leaders of institutions are advised to ensure these agreements have passed the scrutiny of the government’s legal advisors. This must be regularised for all ministries and state-owned enterprises,” Mutorwa concluded.