Government has resumed the on-off talks with French energy giant, Areva, to acquire the Erongo Desalination plant, the Windhoek Observer is reliably informed.
This comes as it emerged that President Hage Geingob had proposed that the French Government, which owns Areva, donates the plant, during his visit to France in November 2016, after initial talks between the Government and the mining company had collapsed.
Initially, Government and Areva failed to agree on the US$200 million price tag attached to the aging 20 million cubic-meter sea water purification facility.
Government is now hoping to negotiate a price reduction for the desalination plant which it says is in need of expensive technological upgrades, but which remains of strategic importance to securing consistent potable water supplies for the central region.
“Currently the Cabinet Committee on Water Supply Security is engaging Areva to try and convince them to lower their price,” Minister of Agriculture, Water and Forestry, John Mutorwa told the Windhoek Observer on Thursday.
Areva Managing Director, Hilifa Mbako, confirmed the talks, but was not forthcoming with details of the new engagement.
“Government has officially approached us to resume talks over the sale of the desalination plant,” Mbako said.
Quizzed if the company would be willing to revise its asking price, considering how it became the sticking point in concluding the acquisition of the water facility originally built to supply the mothballed Trekkopje uranium project, the Areva executive said the previous offer had expired.
“The offer we gave to Government was for three years ago and it expired. It’s no longer the same,” Mbako said declining to clarify if the miner’s asking price has gone up.
“We first have to resume the talks and this will give us an indication of what Government is asking, allowing us to determine the price for the plant.”
The Areva water plant located 65 kilometres outside Swakopmund has a capacity to produce 20 million cubic litres of water and is currently only selling five million cubic litres mainly to the Swakopmund municipality and three mines in the area, namely Rössing, Langer Heinrich and the Husab Mine. Interestingly, the decision by Government to court Areva comes as it is seeking consultants to carry out a feasibility study for the construction of a new desalination plant at the coast and a pipeline to transport water to the country’s central areas, which are threatened with water shortages should a lasting solution not be found.
The Windhoek Observer reported last October that the German Government, through its development bank, KWF, had offered Windhoek about N$8 billion for the construction of the desalination plant and pipeline.
Government already has a feasibility study conducted by the German consultancy firm, Fishner, which it initially hired to consult on the possibility of building its own desalination plant, but the project was shelved due to lack of technical expertise to implement it.
Although no timelines were available in spite of queries by this newspaper, initial indications were that the project was supposed to reach financial closure earlier this year and be completed by 2021. Mutorwa said the feasibility study will allow Government to make an informed decision over the planned construction of its own facility.
“The Harambee Prosperity plan gives a directive that Government must consider constructing its own desalination plant to supply water to the coast and the central areas,” the minister said.
“Our negotiations with Areva are not concluded and have no guarantees that they will be successful.
“The water from Kombat and Grootfotein was meant to avoid Windhoek running dry, which we did achieve, but are not long term solutions. The money that KWF has made available is for the feasibility study, which will allow us to see how we will do it. The study will also make us understand about the planned desalination plant with Botswana.”
Deputy Permanent Secretary for Water Affairs and Forestry, Abraham Nehemia, said the feasibility study, which he expects to take at least six months to complete, will only be awarded to a successful candidate next year.
“It’s a big project we are talking about and a strategic one. We have been talking to Areva for years and nothing has materialised. The study will give us the information we require as we want the construction to have a two-pronged approach, supplying water to the coast and the central areas to be addressed,” he said.
“We are talking about billions of dollars and this should not be about Government funding it, it’s a Namibian project and requires everyone to play their part including the private sector.”
The operations of the desalination plant and the pumping of the water, according to initial plans, were to be aided through a solar power plant which will also be constructed as part of the multi-billion project.
KWF has already provided 40 million Euros towards the upgrading and rehabilitation of the Gammams wastewater treatment plant.
The plant treats domestic sewage generated in Windhoek to environmentally acceptable standards while at the same time provides raw water for further treatment at the Goreangab potable reuse plant.
Namibia and Botswana are also mulling long term plans to jointly construct a multi-billion dollar water pipeline and desalination plant that will draw water from the Atlantic Ocean to be shared by the two neighbouring countries.