Water deal down drain

GOVERNMENT says it hopes to recover at least N$11 million from the now defunct Nossob River Systems (Pty) Ltd for defective water meters it installed countrywide.

But it could be many more months before legal proceedings can start. Nossob is now believed to exist only on paper.In 2002, Government brokered a deal worth N$35 million with the company for upgrading water systems and installing prepaid water meters at 18 towns and villages.Local Government Permanent Secretary Erastus Negonga told The Namibian yesterday that it had paid the company around N$32 million, but had withheld the rest of the money when it realised the products were defective.”For us the crux of the matter is that after final delivery the prepaid meters were not of an acceptable quality and started to give problems.We are seeking advice from the Attorney General’s office for legal action,” said Negonga.The Ministry also withheld money for the five-year maintenance contract the Ministry and town councils entered into with Nossob, which should have kicked in a year after the guarantees of the products lapsed, This part of the contract was worth N$1,5 million.Attorney General Pendukeni Iivula-Ithana told the National Assembly last week that her office had been approached by the Ministry of Regional and Local Government, Housing and Rural Development to institute legal action to get some of the money back.But she said her office was still awaiting a report from the Ministry, which would assess and quantify the damages, before litigation could proceed for recovering some of the money spent.At this stage, she said, a claim of N$11 million was being considered against Nossob River Systems.She was answering questions by the DTA’s Johan de Waal, who wanted to know what Government was doing to get back money it paid for the installation of prepaid meters, which were either broken or causing problems at most of the towns where they had been installed.”My view is that in the computation of losses occasioned to the Ministry and the local authorities, the direct damages of the prepaid units themselves and the wasted water must be subtracted from the monies paid.The losses of revenue because of the inability to compute charges because of the faulty units, if repairable, the costs of repair and so forth must also be collected from Nossob as special damages,” said Iivula-Ithana.Attempts by The Namibian to trace Nossob River Systems have proved futile.Telecom said yesterday that a telephone number listed for the company in the telephone directory had not been operational for some time.The AG told Parliament that she believed the company was now only a “paper company” existing only to be able to litigate with South African company Tegnovo, from which it had bought the water meters.Iivula-Ithana said she would be taking a “shot in the dark” to give an opinion on whether Government would successfully recover any money from this botched contract, because she did not know what the asset bases of either Nossob or Tegnovo were.Litigation in South Africa had also not begun, she added.”The claim against Nossob, and in turn, its claim against Tegnovo ought to be compiled, then we can assess the difference between the value received and the cost of the default, plus consequences of default such as loss of revenue,” said Iivula-Ithana.Nossob’s last available financial statements in 2003 reflected losses of N$6 million.According to investigations by her office, the company had also failed to pay fees to its auditors Deloitte and Touche.As a result more recent statements could not be supplied.According to the Ministry’s 2003-04 annual report, Nossob installed more than 8 000 of the defective meters.Nossob serviced Katima Mulilo, Arandis, Rehoboth, Eenhana, Rundu, Oshakati, Okakarara, Outapi, Khorixas, Gibeon, Berseba, Kalkrand, Kamanjab, Stampriet, Tses and Uis.Nossob is now believed to exist only on paper.In 2002, Government brokered a deal worth N$35 million with the company for upgrading water systems and installing prepaid water meters at 18 towns and villages.Local Government Permanent Secretary Erastus Negonga told The Namibian yesterday that it had paid the company around N$32 million, but had withheld the rest of the money when it realised the products were defective.”For us the crux of the matter is that after final delivery the prepaid meters were not of an acceptable quality and started to give problems.We are seeking advice from the Attorney General’s office for legal action,” said Negonga.The Ministry also withheld money for the five-year maintenance contract the Ministry and town councils entered into with Nossob, which should have kicked in a year after the guarantees of the products lapsed, This part of the contract was worth N$1,5 million.Attorney General Pendukeni Iivula-Ithana told the National Assembly last week that her office had been approached by the Ministry of Regional and Local Government, Housing and Rural Development to institute legal action to get some of the money back. But she said her office was still awaiting a report from the Ministry, which would assess and quantify the damages, before litigation could proceed for recovering some of the money spent.At this stage, she said, a claim of N$11 million was being considered against Nossob River Systems.She was answering questions by the DTA’s Johan de Waal, who wanted to know what Government was doing to get back money it paid for the installation of prepaid meters, which were either broken or causing problems at most of the towns where they had been installed.”My view is that in the computation of losses occasioned to the Ministry and the local authorities, the direct damages of the prepaid units themselves and the wasted water must be subtracted from the monies paid.The losses of revenue because of the inability to compute charges because of the faulty units, if repairable, the costs of repair and so forth must also be collected from Nossob as special damages,” said Iivula-Ithana.Attempts by The Namibian to trace Nossob River Systems have proved futile.Telecom said yesterday that a telephone number listed for the company in the telephone directory had not been operational for some time.The AG told Parliament that she believed the company was now only a “paper company” existing only to be able to litigate with South African company Tegnovo, from which it had bought the water meters.Iivula-Ithana said she would be taking a “shot in the dark” to give an opinion on whether Government would successfully recover any money from this botched contract, because she did not know what the asset bases of either Nossob or Tegnovo were.Litigation in South Africa had also not begun, she added.”The claim against Nossob, and in turn, its claim against Tegnovo ought to be compiled, then we can assess the difference between the value received and the cost of the default, plus consequences of default such as loss of revenue,” said Iivula-Ithana.Nossob’s last available financial statements in 2003 reflected losses of N$6 million.According to investigations by her office, the company had also failed to pay fees to its auditors Deloitte and Touche.As a result more recent statements could not be supplied.According to the Ministry’s 2003-04 annual report, Nossob installed more than 8 000 of the defective meters.Nossob serviced Katima Mulilo, Arandis, Rehoboth, Eenhana, Rundu, Oshakati, Okakarara, Outapi, Khorixas, Gibeon, Berseba, Kalkrand, Kamanjab, Stampriet, Tses and Uis.