9 April 2013

Namibia: Tnamib Board Faces the Chop

THE board of troubled TransNamib is set to get the boot if a proposal by the Ministry of Works is approved.

This comes after allegations emerged at the end of last year that the parastatal was involved in questionable loss-making property deals.

The Namibian has learnt that the process that could end with the dismissal of the board is receiving "the Ministry's highest attention".

According to well-placed sources, Works Minister Erkki Nghimtina, has sought legal advise on how best to deal with the controversial board.

Nghimtina could not confirm nor deny the alleged plans, opting to be diplomatic on the issue: "The ministry has taken a keen interest in the situation at the parastatal".

One of the deals that raised eyebrows was one between TransNamib and Afrikuumba Construction (Pty) Ltd.

Under the deal, the parastatal will lease 69 000 square metres of land situated along Independence Avenue in Windhoek to Afrikuumba for development. The envisaged development would include residences and a shopping mall.

Titus Nakuumba, the executive director of Afrikuumba Construction and TransNamib board chairperson Festus Lameck are reported to be very close friends. Both men claim that they are merely acquaintances.

Nghimtina, was cagey about whether he had given permission for the controversial 50- to 90-year leases of TransNamib property. The leases, described as a private-public partnership, were reportedly considered so bad for TransNamib that the Permanent Secretary of the Ministry of Works, Peter Mwatile, recommended that the minister fires the board, according to a report in the November edition of Insight magazine.

A source close to Nghimtina yesterday said the minister as a political appointee is the head of the ministry has the final say in ministerial matters, adding that "attention is there" with regards to TransNamib troubles.

"It's like in a house. If a kid says he or she wants meat, you don't just immediately give that kid the meat but you first consider your options. That is the same situation we are in," said the source.

The source added "The permanent secretary is not above a minister. He can give suggestions but they would not be final and would need to be considered".

Mwatile on Sunday declined to comment on the reported desire by the line ministry to give the board the boot.

It is not clear whether the firing of the board will also affect the controversial deals that the parastatal is accused of being part of.

Last year Nakuumba denied that there were any underhand dealings between his company and TransNamib. "There is nothing wrong with being acquainted with Festus Lameck or anybody else. Even though I know the gentleman, it doesn't mean that's how I got the business.

"We don't entertain any corrupt practices. To us, it's above board. We are a company of ethics."

In December last year, TransNamib board of directors distanced themselves from any wrong doing by issuing a statement.

"For the record, there is nothing sinister about the transaction relating to the mixed development of commercial and residential properties of Erf 194 along Independence Avenue, Windhoek."

The statement said Afrikuumba emerged the best contender for the project after it was evaluated by management together with outside consultants. After this, the proposal was submitted to the property committee, which recommended it to the board for approval," the statement read.

Under the current deal, TransNamib earns a monthly rental of N$240 000 from the property but its expenses amount to N$600 000. This means it is making a loss of N$360 000, the board said.

In terms of the new agreement, TransNamib's earnings will shoot up to N$9 million in year four and N$18,7 million in year five, the board said.

In November last year, Insight magazine reported that TransNamib wanted to dispose of its 50% stake in the Swakopmund Hotel and Entertainment Centre - reportedly worth N$160 million - for N$2 million, a deal TransNamib denied.

TransNamib also denied that another of TransNamib's assets, the Gammams Training Centre in Windhoek, was making huge losses, as was reported by Insight. The magazine reported that a recent internal audit report had indicated that the losses incurred by Gammams Training Centre over the past two years ran into millions of dollars.

According to Insight, the centre's financial records are in a shambles as there are allegedly no proper records of guests staying at the centre, while catering equipment, bedding, television sets, projectors and a host of other items have gone missing

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