Nghimtina leaves legal dilemma

26 June 2015
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Former Minister of Works and Transport Erkki Nghimtina made a decision that has left TransNamib with an awkward legal problem just three days before he left office.

He appears to have hastily given consent for TransNamib to renegotiate the terms of a long-term lease agreement, with only one of four companies that the railway parastatal had signed contracts with.

Nghimtina gave TransNamib the green light to renegotiate agreements with only Quenet Capital in a  letter dated 17 March 2015 that was sent to the then Board Chairperson Pieter Oosthuizen

Stacks Properties, Afrikuumba, Beauhomes and Quenet Capital had signed public private partnerships agreements with TransNamib.

In some cases some of the companies had registered notarial leases at the time Nghimtina decided to terminate the agreements.

The minister reasoned that the agreements were against public policy, the public interest and the National Transport Services Holdings Company Act.

With the consent of Cabinet, the former works minister directed TransNamib by means of a letter dated 4 June 2014 to terminate all the various joint venture agreements relating to various properties owned by the parastatal.

Stacks and Afrikuumba requested further discussion in the hope that the minister would revisit the terminations.

However, Quenet threatened litigation if it did not receive an undertaking that TransNamib would withdraw the termination of the agreement it had with the parastatal.

In November last year, the TransNamib board wrote to Nghimtina to propose two different ways of handling the four companies that had all reacted to the minister’s decision in different ways.

“The board proposes a differentiation in dealing with those agreements already structured as purported TransNamib “subsidiaries”, namely Bahnhof and Fixture on the one hand, and those that are outright long-term leases, namely Quenet and Beauhomes,” the letter reads.

The letter further said that they had already partly restructured the agreements with Bahnhof and Fixture to comply with the Act.

The board proposed that they could incorporate further amendments to the agreements to ensure that they maintained ministerial oversight and control.

“The board is hereby seeking the consent of the minister to engage in discussion with Bahnhof and Fixture for the restructuring and renegotiation of the deals.

“Once the minister’s consent is obtained, the board will obtain professional assistance (legal and commercial) on how best the deals should be restructured,” the letter reads.

For reasons known only to the former transport minister, he eventually selected only Quenet Capital to continue its business with TransNamib.

Fixtures Director Titus Nakuumba maintained this week that they had a legally binding agreement with TransNamib.

He said both parties had to agree to cancel the agreement unless one of the parties found itself in breach of the agreement.

“I currently have all the right to seek legal redress because TransNamib is currently in breach for not upholding its part of a legal agreement.

“I have spent tens of millions in preparation for that project and I’m facing numerous penalties from the tenants I promised occupation a long time ago. “Imagine 40 line shops sue you for the profit they intended to make in the next four years. We will simply pass it on to the party that is in breach of the contract in the first place,” Nakuumba said.

He explained that at no point did the former works minister call on his team to present their case or discuss an amicable solution for the way forward.

“At the end of the day, nobody wants to run to court, but we hope that someone at the ministry of works or TransNamib remembers that they have tasks to perform to implement this thing once and for all,” he said.

The TransNamib board forwarded another request to the new minister of works and transport Alpheus !Naruseb on 19 May asking to engage the companies. - This email address is being protected from spambots. You need JavaScript enabled to view it.

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