SONJA SMITHAFRIKUUMBA Construction, owned by business magnate Titus Nakuumba, is at loggerheads with TransNamib over a property deal which was scrapped because it did not favour the parastatal.
TransNamib has refused to reinstate the deal which was cancelled in 2014 by former works minister Erkki Nghimtina, after a realisation that Afrikuumba was raking in massive profits at the expense of the parastatal.
Afrikuumba Construction struck a deal to develop erf 194, the stretch of land along Independence Avenue in Windhoek between Bahnhof Street and Simon de Wit Bridge.
Currently, several businesses, among them car dealerships, hair salons, restaurants and the TransNamib technical workshops are situated on the properties. A joint venture company was established, in which TransNamib holds 22% of commercial and 51% of residential interest, with the rest belonging to Afrikuumba, over a 50 to 90-year lease.
TransNamib benefits only if the joint venture company makes a profit, and would only get 22% dividends. The property will be returned to TransNamib after the lease period. The controversial deal was signed during the tenure of the Festus Lameck-led board in 2011. Nghimtina cancelled the agreement.
understands that works deputy minister Sankwasa James Sankwasa met the Transnamib chief executive officer, Johny Smith, on Wednesday to discuss the deal.
Although Sankwasa did not confirm the meeting, he told that Nghimtina cancelled the deal after Cabinet had agreed that TransNamib properties belonged to the state.
“It’s like me managing someone else’s properties. I will need authorisation from the owner when I am disposing of them. They were not doing that. But right now, I am not privy to what is happening at TransNamib. But if the board wants to reinstate the agreement, they must let the minister know about it,” Sankwasa stressed.
Smith said the parastatal should only go for deals that have positive returns.
“We should only go into deals which have a positive return on investment for TransNamib. We cannot proceed with anything that is not feasible,” he stated last week.
Transnamib chief corporate communications officer, Ailly Hangula-Paulino told that as part of the parastatal’s turnaround strategy, the property department reviewed agreements to determine their viability.
She said they discovered that several contracts were not in the best interest of TransNamib, or the public at large. The agreement with Afrikuumba Construction, Hangula-Paulino added, was one of those that “needed closer scrutiny”.
Insiders say the new board is divided on the Afrikuumba agreement, with three members supporting it, and the other three against its re-activation.
TransNamib appointed a new board of directors in February this year. It consists of Josephine Shikongo, Michael Ochurub, Gaenor Michaels, Oscar Kaveru, Sigrid Tjijorokisa and Vincent Mberema. Sources said Shikongo, Michaels and Mberema are against the deal, while Ochurub, Kaveru and Tjijorokisa want it reinstated.
Michaels, who is the deputy chairperson, said Afrikuumba must present a financial model for TransNamib before any decision on the deal is made. “I would like to know what is the rate of return out of this transaction, the financial model for TransNamib, and if it is something that we need to establish?
“There must be disagreement sometimes for us to agree. I want to make an informed decision before anything is decided. To say that I am against it sounds a bit harsh, but if the correct financial model is presented to us and if it can be proved, then I am fine with it,” he added.
Board chairperson Tjijorokisa refused to comment on the matter.
Nakuumba said the agreement could only be cancelled through a court of law.
“How do you cancel a legal agreement through a letter? A contract can only be cancelled through the court of law. We are restructuring.
“We have in our possession a letter from the former board chairperson, Elize Angula, which says we should go ahead with the restructuring.
He said the restructuring was done two years ago as per the request of the line minister, and that the company is currently busy developing the properties.
“So, whoever is behind this, you cannot just wake up and cancel an agreement. We are not in default of anything. If they want to cancel this deal, they must pay us N$400 million. We have spent a lot of money on this deal,” he added.
In March this year, TransNamib confirmed that it plans to sell some of its non-core properties to support growth identified in its integrated business strategic plan (IBSP) for the next five years. The parastatal had its portfolio of properties in the country valued at N$2,4 billion as at 31 March 2018.
The letter which Nakuumba refers to, dated 16 December 2016, a copy of which is in the possession of set out guidelines for the restructuring.
There were also allegations that Nakuumba attempted to bribe TransNamib’s executive for properties Alynsia Platt to influence the decision in his favour.
TransNamib appointed Platt as its executive for properties on 1 May 2018.
Nakuumba said he has no reason to bribe Platt as he is not a “Mickey Mouse businessman”.
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