MILLENNIUM Challenge Account Namibia has refused to comment on allegations that half of the US$305 million which the American government undertook to give the country over the next five years will actually be coming from Namibia.

The Namibian understands that, under the agreement, Namibia is supposed to pay back US$165 million to the MCC as a reciprocal obligation.

Under the agreement, international service providers will also not be paying value-added tax or income tax in Namibia.

MCA Namibia Chief Executive Officer Penny Akwenye neither confirmed nor denied the information when approached for comment.

"I was unable to respond to your questions due to the fact the Compact is before Parliament for debate and as such I would like to refrain from making a statement at technical level," Akwenye said.

Sources who studied the document informed The Namibian that even though the compact is a grant, it is one-sided and leaves Namibia in a precarious situation since it can be terminated any time by the Millennium Challenge Corporation and does not bind the US government or MCC to any of the obligations assumed in the compact.

They said the total amount that has so far been mentioned - US$305 million - is not necessarily the amount that will be disbursed in terms of the agreement, but "only the maximum amount that may be disbursed".

The agreement allegedly has a clause in it which deals with disbursements and makes it possible for the MCC, at its sole discretion, to pay a service provider directly, even if the National Planning Commission or any other ministry in Namibia decides to withhold the money because of poor service or any other related matter.

According to the same sources, the Tender Board of Namibia has no power with regard to the procurement of goods and services under the compact agreement while companies from countries subject to US sanctions will also not be eligible to compete for MCC-funded contracts in Namibia.

The MCA was thrown into the deep end of controversy last month when the Swapo Party Youth League claimed that part of the agreement was to give two lodges in Etosha National Park and two others in national parks in northern Namibia to US investors.

Representatives of the two countries said there was nothing sinister about the deal and that Namibia had proposed that money from the Millennium Challenge Account (MCA) be allocated to Etosha.

Akwenye earlier said the SPYL comments were based on "a document still under negotiation".

The MCA Compact includes a US$45,5 million public investment in Etosha through the construction and renovation of more than 100 staff houses at Okaukuejo, Ombika, Galton Gate and Otjivasandu.

It also includes the construction and renovation of management meeting rooms and workshops for the Ministry of Environment.

It also covers the purchase of road-maintenance equipment for the Ministry of Environment to maintain roads in Etosha.