Rédaction Africa Links 24 with Sonja Smith
Published on 2024-03-07 17:00:00
A dispute has arisen between a state-owned Namibian military construction company and its Israeli partners over a N$1.2 billion power station tender, specifically regarding how the profits of the project should be shared. The government-owned August 26 Construction is demanding N$36 million in profits from the project, a demand that has been rejected by its Israeli partners who claim to have been the sole contributors to the project financially.
The dispute has led to a standoff, with NamPower, the national power company, threatening to impose a monthly penalty of N$33 million for delaying the national project. The joint venture, which includes August 26 Construction, Phim Investments CC, and Israeli company FK Generators & Equipment Limited as the lead contractor, was awarded the contract to set up a diesel power station known as ‘Anixas II’ near the National Fuel Storage facility in Walvis Bay in March 2022.
However, disagreements over financial matters have plagued the partnership since last year, prompting August 26 Construction’s managing director, Colonel Martha Endjala, to seek intervention from NamPower’s managing director, Simson Haulofu. August 26 Construction has accused NamPower of agreeing to its removal from the partnership, leading the military company to take legal action.
The Israeli partners, represented by FK Generators & Equipment, have argued that the project is not profitable, with profits standing at only 1.56%. They claim to have invested millions in the project, including N$51 million in a deposit account and N$35 million in direct cash funding. Due to financial burdens such as material price increases caused by the Russia-Ukraine war and earthquakes in Turkey, the Israeli company has invested additional funds to keep the project moving forward.
Haulofu warned both partners of a penalty of N$1 million per day for project delays, emphasizing the national importance of the Anixas II project and its impact on Namibia’s electricity supply security. The project, which began in May 2022 and was scheduled for completion in December 2023, has faced significant delays, prompting concerns about its impact on electricity supply in the country.
Despite the ongoing dispute, NamPower has maintained confidentiality over the matter, citing provisions in the engineering, procurement, and construction contract for the Anixas II project. Phim Investments CC, another partner in the joint venture, did not respond to inquiries regarding the dispute.
In conclusion, the dispute over the N$1.2 billion power station project highlights the challenges and complexities in managing joint ventures between state-owned and private companies. The financial disagreements and delays underscore the need for clear communication, transparency, and effective dispute resolution mechanisms in large-scale infrastructure projects. The resolution of this dispute will be crucial for ensuring the successful completion of the Anixas II power station and safeguarding Namibia’s electricity supply.
Read the original article on The Namibian
