TRANSPORT minister John Mutorwa announced yesterday that a multibillion-dollar partnership agreement between the Roads Contractor Company and a Chinese company was illegal and should be terminated immediately.
State-owned RCC concluded the agreement on 6 April 2018 with Nantong Sanjian, for a N$580 loan to avoid being shut down. Under the agreement, the Chinese company was to give RCC N$580 million in exchange for partnering with the Namibian parastatal on projects in which the Chinese company’s stake would amount to over N$2 billion.
The agreement has not impressed senior ministers, including Mutorwa, who held a press conference yesterday to explain government’s position on the matter.
He said there was a high-level meeting in Windhoek yesterday, which was chaired by Prime Minister Saara Kuugongelwa-Amadhila and attended by himself, attorney general Albert Kawana, finance minister Calle Schlettwein and public enterprises minister Leon Jooste.
Announcing the outcome of the meeting, Mutorwa said: “The RCC board was already officially notified [yesterday] to formally inform Nantong that [the] 9 April 2018 agreement is invalid and unenforceable in law, and that the purported contractual relationship between the RCC and Nantong immediately ceases”.
Mutorwa said the decision to cancel the Chinese deal was based on a legal opinion from Kawana.
reported yesterday that Mutorwa wanted to fire the board and RCC chief executive for committing the government to the Chinese agreement without consulting the transport ministry and the attorney general.
Mutorwa yesterday said disciplinary action could be taken against officials who signed the agreement. He said the matter will still be discussed at Cabinet level.
According to him, officials were working on a draft submission to be tabled in Cabinet next week.
Mutorwa denied that he was taking a back seat in the RCC matter, but he still failed to clearly explain whether he was in favour of the RCC closing or remaining in business.
He said the RCC was not a board, but a company with workers.
Mutorwa said his views on the parastatal do not matter, because Cabinet, and not a single minister, will eventually make the decision.
The minister said the RCC board only informed him 11 days after they had signed the agreement with the Chinese entity.
The contract between the RCC and Nantong Sanjian allowed the Chinese company to pay 10% (N$58 million) of the total funding amount (N$580 million) to the RCC for signing the agreement.
“Such amount shall be refundable by way of deduction from the full funding amount,” the agreement stated.
Mutorwa said they acted quickly to stop the payment because they told the RCC not to act on the controversial agreement.
RCC chairperson Fritz Jacobs, who has been battling to keep the RCC going, insisted this week that a legal opinion obtained by the board on the Chinese partnership showed that the agreement was “supported by relevant statutes, information and authority”.
“It is not the first time that especially those who wanted to close the RCC were crafting plans to remove the board. We are resolute and focused on the success of the RCC,” he said.
Jacobs further said the constant moving of goalposts regarding the RCC and the persistent drumming up of every conceivable reason to do away with the company were not painting an objective picture and in the national interest.
“The self-sustaining funding solution is a milestone for the RCC. The board has expressed itself that the funding is sufficient and adequate to normalise the operations of the RCC,” he stated.
According to Jacobs, the resuscitation of the RCC would contribute towards Namibia’s economic progress.
“We cannot allow about 400 people to go home (and about 1 200 dependants, based on NSA census averages), as if they will find employment elsewhere, while our GRN projects and infrastructure implementation rate is at the current slow pace,” he stressed.
