The Namibian (Windhoek)

13 February 2013

Namibia: N$12 Billion Worth of Tenders Exempted

THE national Tender Board, charged with the government's procurement, exempted tenders worth N$12,3 billion between 2004 and 2007, exceeding the amount for tenders awarded through the normal procurement process.

Revelations of the N$12,333 857 600 spent in four years comes a few weeks after The Namibian reported that there is a trend emerging at various ministries where they request exemptions under the guise of urgency or security concerns or to empower small and medium businesses, while the real reason is to benefit companies owned by people close to officials involved in the procurement process.

The 2004 Tender Board annual report shows that the board awarded tenders worth N$548 million and exempted tenders worth N$1 billion.

The spree continued the following year, when N$6,2 billion was exempted from public procurement while N$619 million went through the normal procedures.

In 2006, N$1,6 billion worth of tenders were given to selected bidders while N$868 million went the formal way of procurement. In that year, 638 tenders were advertised - 191 annual and 447 formal tenders.

According to the report, a total of N$3,5 billion worth of tenders were exempted from the normal process the next year, while the public got the chance to apply for work to tenders worth only N$624 million.

Current Trade and Industry Minister Calle Schlettwein, who was the chairman of Tender Board at the time, admitted in the report that exemptions in 2007/2008 financial year saw an overall increase of 112,2% compared to the previous year.

"This increase in exemption approval could be attributed to factors such as urgent construction of and extensions to classrooms due to the exceptionally high demand for classrooms in the Khomas and northern regions for the ever-increasing number of learners," Schlettwein said in the report.

The same document, which is the latest Tender Board annual report to be made public, shows that 2007 saw N$1,58 billion worth of tenders exempted for construction work, N$30 million for consultancy work and N$3,2 million for vehicles.

The handpicked companies that benefited from the exemptions are not listed in the reports.

The Tender Bulletin this week reported that exempting N$12 billion from 2004 to 2007 means that the government procured six times more goods and services without an open tender process than with.

"Value of tenders exempted exceeded that of tenders administered through the national tender board in each of the years," it reported.

The Bulletin also reported that it had picked up a trend of an increase in Black Economic Empowerment (BEE) companies.

"This raises the question whether this is coincidental, or whether there is a connection to the high rate of tender exemptions during the same period."

The chairperson of the Tender Board, Ministry of Finance Permanent Secretary Ericah Shafudah, declined to comment on the above statistics, saying she was not the chairperson at that time.

For the last five years, no Tender Board annual reports have been made public.

Shafudah, who became chairperson of the board in 2010, said the nation can expect another annual report next month, blaming the absence of annual reports on a lack of manpower at the secretariat.

Finance Minister Saara Kuugongelwa-Amadhila could not comment on the figures yesterday as she was not at the office.

Kuugongelwa-Amadhila tabled three old annual reports of the Tender Board for the 2005-06, 2006-07 and 2007-08 financial years in 2010.

The past three years have been crucial for the Finance Ministry, especially relating to tenders given through the Targeted Intervention Programme for Employment and Economic Growth (Tipeeg) which came into force in 2011.

According to Tender Board rules, single or restricted tender procedures may only be used in circumstances when open competitive tendering would not be an effective means of obtaining the requisite supplies or services - for instance, "where there is extreme urgency brought about by unforeseeable events and where the delay that would arise as a result of open tendering would seriously harm the public or security interests".

Over the years the Ministry of Finance has promised to reform the government tendering process, but it is not yet known when the tightened regulations will come into effect in order to discourage corruption and waste.

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