The Namibian (Windhoek)

21 December 2012

Namibia: Works Reverses Controversial Aus Rail Tender

THE Ministry of Works has accused its consultant and its own officials of being biased towards a company that was recommended for a N$60 million railway upgrade tender between Lüderitz and Aus.

In a submission written to the national Tender Board calling for the cancellation of the tender, the ministry said it discovered that the consultant had designed the tender format to favour the joint venture between Profile Investments and Voestalpine-Vae SA. The ministry's internal tender committee had recommended to the Tender Board that a Profile-Vae joint venture be awarded the N$62 million job.

The tender was cancelled last week Friday. The permanent secretary in the ministry, Peter Mwatile (photo), said the company that was supposed to get the tender was in conflict of interest because the consultant was also the principal agent for D&M, which Profile-Vae SA had subcontracted to do some of the work on the railway.

"The consultant of the tender, K&A Partnership Consulting Engineers, represented by M [Michael] Rumsey whose firm is also the principal agent of D&M Rail Construction, is regarded as biased or in conflict of interest," said Mwatile in a letter to the Tender Board.

Profile-VAE appointed D&M Rail Construction to deliver the rails. D&M is owned by businessmen John Walenga and James Hatuikulipi.

Walenga was also a part owner of Profile Investment until 2010. Profile is owned by Veino Nghipondoka.

D&M was earlier this year under the spotlight after it emerged that it was favoured by the Works Ministry for railway contracts ahead of the parastatal TransNamib.

Nghipondoka told The Namibian on Wednesday that he had no business relationship with Walenga or anyone at the Ministry of Works.

"Walenga is a comrade, just like any other comrade," he said.

"They simply did not want us to get the job," he said.

Nghipondoka said the dispute was being handled by their lawyers.

Consultant Rumsey told The Namibian that he could not comment on the accusations that he had a conflict of interest since he did not see the report and was in South African.

Mwatile declined to comment about his letter to the Tender Board.

"I don't discuss Tender Board submissions through the media. Ask the Tender Board about that," he said.

In the submission, the PS said the consultant evaluation report done by K&A Partnership Consulting Engineers was found to be biased.

Mwatile wrote that, for instance, the consultant disqualified one applicant, Oshana Wholesalers, for not providing a "bid guarantee" which was not part of the requirements, and the appointment of subcontractors, which was also not a requirement.

This is despite the fact that both Oshana and Profile-Vae gave bank guarantees from two institutions stating they would have the money if their bids succeed.

"The list of specialised subcontractors under the requirements/tender conditions was not necessary and made it difficult for local companies to tender. The ministry points out that the playing field be levelled by revising tender requirements on the procurement and delivery of rails," wrote Mwatile.

Asked why his ministry had allowed the process to get that far before raising flags, Mwatile said the decision was taken without going through technical vetting and was only discovered after new evaluation committees were established.

"During the awarding process, a new ministerial committee was put in place and also a technical evaluation committee and that is how the shortcomings were detected," Mwatile said.

Another reason Mwatile appears to have been against awarding the tender to Profile-VAE is because the company had received many contracts before and that was not in line with "fair distribution of work".

The tender for the procurement and delivery of rails will be re-advertised.

Meanwhile, Mwaitile rubbished allegations that he had abused his powers as permanent secretary by stopping the tender, stating that he had to make sure work was done properly.

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