Govt trapped in N$5m deal

01 June 2018 Author   Sonja Smith
The Ministry of Justice is faced with an N$5.3 million claim from a company it had engaged to structure a financing model for the construction of three buildings worth N$1, 3 billion under Public Private Partnerships (PPPs).
The dispute over the payment comes as the ministry argues that it never entered into an agreement with South Haven Investment owned by Zimbabwean national, Nick Mwanandimayi, and neither was it consulted on the work that the company claims it carried out on its behalf. 
Documents seen by the Windhoek Observer reveal that, Justice Permanent Secretary, Issaskar Ndjoze wrote a letter to South Haven Investment on February 6, 2016, requesting an audience with the company to structure a financial model and project management services for the construction of the ministry’s headquarters at a cost of N$555 million, the Attorney General office at a cost of N$380 million and the Office of the Prosecutor General at a cost of N$391 million under PPPs.
“The ministry was facing a situation where projects to construct official headquarters for the Ministry of Justice, Office of the Prosecutor General and the Office of the Attorney General have been pending for an inordinately long period.
“Due to the unavailability of funds in our vote, I was mainly concerned about sitting with completed excavations without having certainty as to when we would be starting with construction.
“Mr Arnold Muvadi, an architect employed within the Ministry of Works and Transport, indicated to me that through a 2006 Resolution, Cabinet authorized the Ministry of Justice to execute its projects via Public Private Partnerships (PPPs).
“On 9 February 2016, I wrote to the Director of South Haven Investment, pointing out that the ministry wishes to engage his company with providing a financial model and project management services in Public Private Partnership for the construction of its selected capital projects within Namibia,” Ndjoze said.
Ndjoze, according to court documents, maintains that after writing the letter, he expected the company to notify him of its intention to enter into negotiations regarding the ministry’s proposal.
“But instead, the company wrote back to him three days later with a completed financial model and invoice of N$5,3 million attached. I maintain that at this point of writing the letter, the least I was expecting was an answer that the company is prepared to enter into negotiations pertaining to terms of a contract of consultancy with the ministry.
“As stated, I was not expecting the plaintiff (South Haven Investments) to commence with the financial model without any agreement as to the quality of the model, the price to be charged, etc.,” Ndjoze said.
The justice ministry PS also maintains that the model provided was not up to standard, as it lacked detail and input from the ministry.
 “As expected, the rushed financial model did not amount to an up-to-standard financial model because there was no input from our side as to the specific terms. The financial model does not indicate the costs implicated to demolish the heritage building currently sitting on the building site, it does not reflect that the land on which the buildings are to be constructed on belong to the ministry.
“I maintain that with such a defective performance, fairness and public policy would not require the ministry to pay for such services,” Ndjoze said.
Sources, however, say Ndjoze could have violated government procedures, as he failed to seek treasury approval before engaging South Haven Investment over the proposed PPP.
The PS is also being accused of handpicking South Haven Investment, violating public procurement procedures, which require ministries to get at least three quotations or go on tender.
“There is no agreement signed between the two parties it is just letters exchanged. How did he come to pick this company without an advertisement or going on tender? Where are the quotations from which he chose this company? Something is fishy with all of this,” a source familiar with the matter said.
A senior government official who refused to be named accused South Haven Investment of trying to milk money from government without having been officially appointed.
“You cannot receive a letter asking for an audience and then you go ahead and claim appointment on your own, do the work and charge government. As a service provider, can you not engage your client in drawing up an agreement or even what percentage must be for the PPP?” the official queried.
Mwanandimayi maintained that services were rendered, with the financial model for the PPP having been completed on April 11, 2016.
He wants government through the Ministry of Justice to pay his company N$5,3 million for the job done and services rendered to them.
“We had follow-up meetings where we had preliminary discussions with the PS and one of his directors by the name of Bock after the exchange of letters. He was aware of our charges and everything involved. Our company was picked because we have done PPP projects before, and our company’s name just came up. The PS even gave us a date on which he would pay us our money,” Mwanandimayi told the Windhoek Observer.
Contacted for comment, Ndjoze refused to comment.
“My dear, I am not going to talk about this matter. I cannot comment on it now seriously,” he said before he hung up the phone.
Asked whether he was approached for approval by the Justice Ministry PS, Finance Minister, Calle Schlettwein, said his office was not consulted.
“My office is not aware about being approached for this matter at all. Let me look around and come back to you,” Schlettwein said.
The case is postponed to June 7, 2018 at 15:00.

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