No Pohamba directive

13 March 2014 Author  

front oil 14 marchMINISTER of Mines and Energy Isak Katali has denied circulating claims about a presidential directive that contractors must complete the Oil Storage Facility at Walvis Bay before President Hifikepunye Pohamba’s term of office ends in March 2015. “This is a lie. It is worth pointing out, that what is being bandied around by unscrupulous and selfish elements as a “Presidential Directive”, is fictitious, designed to mislead the public, discredit the person and office of President,” Katali said.

In an interview this week, Katali said that he was present in all meetings with the president regarding the oil storage facility and not once did President Pohamba utter such remarks.

“The only thing the president said was that the project should be fast-tracked. He at no point linked any deadlines to that of the end of his tenure,” Katali said.

The minister further remarked that there were people who just wanted to further their own agenda by using the president’s name behind the scenes for their own selfish interests to speed up the project.

Contrary to the president’s wishes, the process has come to a halt, as the Tender Board has not yet met to decide to which of the two shortlisted companies it will give the contract.

Permanent Secretary of the National Planning Commission Leevi Hungamo this week confirmed that they had referred the final bids from two companies, Stature Investments and China Harbour Construction Engineering to the Tender Board.

Although they forwarded the documents to the Tender Board towards the end of 2013, three months or so later it has not met to deliberate on the matter yet.

Hungamo further acknowledged that the cost to construct the oil storage facility was significantly higher than the initial budget estimates ranging from N$900 million to N$1.5 billion. He attributed the ballooning cost of construction to the fact that the jetty had exceeded its designed lifespan and that for the construction of the oil storage facility an entirely new jetty had to be constructed.

According to Hungamo, this additional expense explained why Stature Investments and China Harbour Engineering Construction had quoted government N$4.8 billion and N$3.7 billion respectively.

He further explained that the National Energy Fund was supposed to fund construction of the oil storage facility, but at that time, Government did not anticipate the cost would exceed N$1.5 billion.

However, now the initial budget had doubled according to the quotations of the two shortlisted companies, Government had decided to put a fifteen percent levy on petrol to help fund the project.

The permanent secretary also rubbished claims that either of the companies had invoiced the ministry for any work done to date, as neither had received the award of the tender.

He continued to explain that the only invoices received were those of the consulting engineers who conducted feasibility studies for Government regarding the project.

So far, the consulting engineers have submitted an invoice totalling 1.4 million Euros.

“If anyone at the ministry is aware of any invoices from one of the two shortlisted companies they should inform me and I will report them to the police, because nobody has won the tender yet,” Hungamo said.

In addition, speculation has been rife that Hungamo himself allegedly has a vested interest in China Harbour Engineering Construction winning the tender, and has been trying to ensure its success.

Hungamo denied the claims and in a joking manner said that he understood that the Chinese company had links to its government, questioning how he would have personal ties with the Chinese government.

“Let me also put it on record that the decisions of the Tender Board are never made by one person but by a collective,” he said.

The tender F1/7-36/2012 for the construction of the National Oil (petroleum storage), petroleum off-loading (petroleum jetty) and a pipelines facility involves the engineering, procurement and construction of a 70,000m3 oil storage facility, buffer pump station, petroleum pipelines and oil tanker jetty.

The petroleum facility planned for Walvis Bay attracted as many as 31 bids from major league global marine engineering consortia.

Most of the 31 companies who tendered for the pre-qualification in February last year, were foreign companies with local partners.
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