RA, RCC sign MoA

01 November 2019

The Roads Authority (RA) and beleaguered government-owned contractor, Road Contractor Company (RCC) finally signed a memorandum of agreement (MoA) this week, which is expected to facilitate the implementation of a cabinet directive on how the two entities should work together.

The signing of the agreement is part of governments efforts to save the company, which is on the brink.
“Yes, I can confirm we signed the MoA, but it’s not a commitment that RCC will get contracts from us, but just a working agreement,” RA Chief Executive Officer, Conrad Lutombi told the Windhoek Observer.
Asked if the RCC will be prioritized for any works coming from the road’s agency, Lutombi said the company will be expected to submit its bids like any other company to secure contracts from the RA.
“If they want to secure work from the RA, they will have to tender like everyone else. We have had work performed by RCC in the past and we gave them on tender,” he said.
“The Procurement Act, however, allows us to procure from public entities.” 
RCC Acting CEO, Gerson Karaerua said the company had the capacity to execute contracts that will be awarded by the RA, amid concerns the contractor will struggle to secure working capital.
“The RCC has the capacity to execute the road maintenance projects which will be awarded to it via the MOA. The issue of working capital is being addressed with key stakeholders and a solution is in sight” he said.
Quizzed on the impact of the MOA on the business, Karaerua said the company will be able to generate much-needed income to meet its operational costs.
“RCC will generate income from the execution of projects, so it will be paid for work done,” he said.
The signing of the MoA comes after the RA declined a government proposal to merge its operations with RCC, amid concerns by the RA that the merger of the two entities would not prove beneficial to its operations and thus countered the government proposal by offering to commit road maintenance works valued at N$288 million to the company.
The RA road maintenance contract offer, which is conditional for five years according to insiders, was aimed at avoiding any further efforts to push for the merger of the two by government, which finds it self-weighed down by a company saddled with total liabilities of N$910 million.
Governments initial move to push for the closure of the company could not be implemented after a legal opinion from the Attorney General’s office revealed that the existing RCC Act, particularly section 12, prohibits the winding up or placement of the company under judicial management without the authority of an Act of Parliament.


The Windhoek Observer is an English-language weekly newspaper, published in Namibia by Paragon Investment Holding. It is the country's oldest and largest circulating weekly.

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