A CHINESE state construction company has dumped its Namibian partner in a road contract worth N$900 million, amid allegations of forgery and deception.
In 2015, China Railway Seventh Group and Onamagongwa Trading Enterprise (OTE) won a contract to construct phase one of the Windhoek to Hosea Kutako International Airport freeway, which is part of the Harambee road projects.
That joint venture has, however, been rocked with troubles, including claims that the Chinese company deliberately sidelined and set up the Namibian company to fail. This includes allegations that the Chinese company failed to transfer skills to locals.
The Namibian company is accusing the Chinese of using a fake joint venture agreement to terminate the partnership, while the Asian company says their partner failed to do its job.
In a way, this story is an example of partnerships between Namibian companies and Chinese firms that are mostly window- dressing empowerment.
China Railway Seventh Group wrote a letter on 11 November 2019 to Onamagongwa Trading – owned by businessman Martin Ipinge – saying their joint venture had been terminated.
“We confirm that you, as from 17 October 2019, are excluded from participating in the joint venture,” lawyer Sune de Klerk, who represents the Chinese company, stated.
De Klerk works at Cronjé & Co. She said the Namibian company failed to play its part.
“We also confirm that our client will have no further discussions, meetings or any engagements directly with OTE or any of its members, employers or officials, and that issues should directly be addressed to our office should you wish so. We therefore request you to remove all equipment, employees and any property from all the sites. You must vacate the project within seven days from receipt of this notice.
“We have further instructions to request you [to refrain] from engaging or intimidating our client, as you have done before, and to further vacate the premises as requested above,” said the lawyer.
She added that the Chinese company instructed them to take legal action if the Namibian company continues to intimidate them.
Onamagongwa responded to that threat on 20 November 2019 through their lawyer Slysken Makando, and denied allegations by the Chinese company that it knows about the 2019 contract that was used to terminate their relationship.
“It should be noted by your client that the alleged second joint venture agreement is false, such will be the subject of criminal investigations,” Makando said.
He accused the Chinese company of refusing to pay Onamagongwa's invoices for this project.
Makando also denied suggestions that Onamagongwa failed to deliver their part of the joint venture.
The Namibian company provided letters written since 2018, begging the Chinese company to show that the Asians were setting them up to fail.
“We cannot finish the section because of the culverts which are not finished, and they are being done by China Railway Seventh Group,” Onamagongwa owner Ipinge said in a 15 March letter.
“It is important for us to finish the west-bound so that we are able to work on the east-bound,” he wrote.
The Namibian company also complained that the Chinese firm sold them dreams, and did not train or transfer skills to locals as it was supposed to.
“It was just a smokescreen,” a company official told The Namibian last week.
The company is blaming the parastatal Roads Authority for failing to manage the project, to the extent that the Chinese are calling most of the shots. Sources claimed that Roads Authority officials played fixing roles in the background to match foreign entities and Namibian companies into joint ventures in various Harambee roads projects since 2015.
A China Railway Seventh Group group manager, identified only as Mr Ma, told The Namibian yesterday that Onamagongwa ran into financial problems as soon as the project started in 2016 and owed several Namibian entities, including the tax office, around N$24 million.
Ma said Onamagongwa's participation in the project was initially set at 20%, but the company only finished 3,5% of the work.
“It is further noted that OTE has stopped the construction activities, and removed their equipment from the site since the end of July 2019 without informing us,” Ma added.
The Chinese firm said Onamagongwa were given an advance payment of N$15 million by the Roads Authority.
Onamagongwa only paid back around N$2 million to the Roads Authority, the Chinese firm claimed. Onamagongwa's owners claim they were forced to get loans from banks, just to be stood up by the Chinese company, which failed to pay them.
Police described Ipinge's condition as critical when he was admitted to a Windhoek hospital. He has since recovered.
The article published by on 19 December 2019 entitled “Chinese firm dumps local partner … N$ 900 million road deal turns sour” was written on submissions largely based on the version furnished to the newspaper by Onamagongwa Trading Enterprises CC. China Railway Seventh Group Namibia (Pty) Ltd confirms that the version of Onamagongwa Trading Enterprises CC is being challenged in the High Court of Namibia.
