B1 City company to pay RCC N$15m

THE company that was behind the plans for the now-abandoned B1 City property development project in Windhoek has agreed to pay N$15 million to the Roads Contractor Company to settle the long-pending legal disputes between the two companies.

More than four years after the State-owned Roads Contractor Company (RCC) first instituted legal action against property developers /Ae //Gams Engineering Company (Namibia) to claim millions of dollars back from /Ae //Gams Engineering, an agreement has been signed through which the legal disputes between the two companies are being settled.The settlement agreement was made an order of the High Court on Friday last week.In terms of the agreement, /Ae //Gams Engineering has undertaken to pay N$15 million to the RCC within two months after the signing of the agreement. The RCC signed the agreement on July 4, while /Ae //Gams Engineering director David Imbili signed it on July 14.Work on the B1 City shopping complex and taxi rank project was halted in late 2006, after the Chinese construction company that was working on the project claimed it had not been paid for its work.The project site, in a prime location between Katutura and the Western Bypass road in Windhoek, has since then become overgrown, with grass and weeds encroaching on the partly-completed building on the site.In February 2005, the then Chief Executive Officer of the RCC, Kelly Nghixulifwa, and Imbili signed an agreement in terms of which the RCC and /Ae //Gams Engineering were to undertake the B1 City development as a joint venture. The RCC later changed its involvement in the project, when it instead took on a role as project managers.With work on the project having come to a halt, the RCC lodged two cases against /Ae //Gams Engineering in the High Court in July and October 2007 respectively, to claim a total of about N$19,6 million from the company.In the first, the parastatal was claiming N$5,691 million from the company. In the second case, the RCC was claiming N$13,9 million from the company.The N$5,691 million was money which the RCC advanced to /Ae //Gams Engineering to buy the land on which B1 City was supposed to be built and to construct a taxi rank and market area on the site.The N$13,9 million that was claimed by the RCC was made up of a management fee of N$1,837 million which the parastatal claimed was owed to it, N$5,936 million that the RCC claimed to have paid to engineers, architects and quantity surveyors and for work done on the project, and N$3,8 million which was for work which the RCC claimed to have done on the project itself.The RCC’s attempt to get a provisional sentence for the payment of the N$5,691 million against /Ae //Gams Engineering ended in failure in the High Court in August 2009.In the judgement in which the RCC’s request for a provisional sentence was declined, Judge Kato van Niekerk noted that in terms of an agreement between the RCC and /Ae //Gams Engineering the latter company only has to start paying the N$5,69 million advanced to it back to the RCC, in monthly instalments over a ten-year period, once all the building works on the project site had been completed.The City of Windhoek sold the land where the B1 city was being built to /Ae //Gams Engineering for some N$3,905 million in October 2005.The land itself, measuring 2,26 hectares, was valued at about N$12,43 million about four years ago.