Govt takeover bid of Kavango green project fails in court

THE Ministry of Agriculture suffered the legal equivalent of a failed harvest in the High Court in Windhoek this week with an attempt to evict a farmer from the Vungu-Vungu agricultural project in the Kavango Region, into which public funding running to millions of Namibia dollars has been pumped over the past six years.

Since 2002, the Vungu-Vungu agricultural project near Rundu – where a dairy farm and irrigation scheme are being operated – has received public funding totalling some N$9,73 million, the Ministry of Agriculture is stating in documents filed with the High Court.
Claiming that the yield from this investment has been poor beyond expectations, and blaming the people in charge of the project for this, the Ministry on Friday last week attempted to get a court order evicting the project manager, Uvhungu-Vhungu Farm Development Close Corporation, from the project site and placing the project under the Ministry’s direct control.
In a ruling given on Monday, Acting Judge Annel Silungwe found that the Ministry had not shown that the case it wanted to be heard on an urgent basis was in fact a matter of urgency. Acting Judge Silungwe dismissed the Ministry’s application against the close corporation and ordered the Ministry to also pay the close corporation’s legal costs in the case.
In an affidavit filed with the court, the Ministry’s Permanent Secretary, Andrew Ndishishi, claimed that the case was urgent because fields at Vungu-Vungu that already should have been planted with summer crops like maize from October were still lying unploughed and unplanted by mid-December, with time to still use those fields for the planting of mahangu this summer planting season also running out.
According to Uvhungu-Vhungu Farm Development CC’s sole member, Okahandja district farmer and businessman Chris Lewis, the reason why cultivation on the fields had not been done yet this season until the second half of December was because the close corporation’s future with the agricultural project was uncertain, and it would have to invest between N$1,5 million and N$2,5 million in seed, fertiliser and fuel alone to go ahead with cultivating the fields at this stage. Cultivation has in any event now started, he is claiming.
Apart from those projected expenses, capital expenses amounting to N$5 million are also still needed, but the Ministry is refusing to make this contribution to the project as agreed, Lewis is claiming.
In affidavits filed with the court, Ndishishi and Lewis traded accusations over who was responsible for the less than satisfactory performance of the project, with Ndishishi blaming the project management and Lewis in turn blaming the Ministry for the fact that the project has run up substantial losses and has failed to become self-sustaining since Uvhungu-Vhungu Farm Development was appointed to manage the project.
Uvhungu-Vhungu Farm Development was appointed as the project manager at Vungu-Vungu for a 12-year period through an agreement that Lewis signed with the Ministry in July 2003. That was after President Sam Nujoma had instructed the Ministry to take control of the project, which had been run by the Namibia Development Corporation before that, and had asked Lewis to continue with the project with which he had been involved since 2002, the court was informed.
According to Ndishishi, the Ministry has since 2002 invested up to N$9,37 million in the project, but it is still not self-sustaining and is suffering losses that are unsustainable.
‘There is no proper management in place at the project,’ Ndishishi stated in his affidavit.
Ndishishi first wrote a letter to Uvhungu-Vhungu Farm Development in which he threatened to terminate the management agreement in February last year. On August 13 last year, the Ministry’s lawyers, Conradie & Damaseb, wrote another letter to Uvhungu-Vhungu Farm Development, informing it that the Ministry was terminating the management agreement.
After Uvhungu-Vhungu Farm Development’s lawyer, Andrew Theunissen, had replied to that letter, the PS addressed another letter to Lewis on November 28, again informing him that the Ministry was terminating the agreement.
Lewis is however disputing that grounds exist for the cancellation of the agreement.
He is charging that the Ministry was slow in providing the agreed capital contributions for the project, with the result that Uvhungu-Vhungu Farm Development has itself had to contribute over N$7 million to the project up to April last year.
The Ministry has failed to appoint a steering committee for the project, Lewis is claiming. ‘The steering committee would have been paramount to making the project viable and self sustaining. It would further have served as a medium for effective and simple communication between the (Ministry) and (Uvhungu-Vhungu Farm Development),’ Lewis stated in his affidavit.
Lewis claimed that the relationship between the Ministry and Uvhungu-Vhungu Farm Development started to change for the worse after Ndishishi had been appointed as the Ministry’s PS in 2007. After that, he claimed, the Ministry has been undermining the operations of Uvhungu-Vhungu Farm Development and looking for ways to cancel their agreement. The court case was the pinnacle of these efforts, he charged.
Lewis acknowledged that the project had initially been suffering losses. From October 2006, though, it has been turning in a profit, he claimed.
Financial statements provided to the court show that the project had run up losses totalling N$4,2 million from August 2002 to the end of September 2006. Since then, though, the tide has turned, with the project realising a profit of over N$3,53 million in the year to the end of September 2008, the documents before court indicate.