12 September 2017

Namibia: Threats of Retrenchments, Delays At Neckartal

NECKARTAL Dam builder Salini Impregilo yesterday wrote a stern letter to government insisting on the prompt payment of N$396 million for them to continue working on the project.

The letter, seen by Nampa, is addressed to minister of agriculture, water and forestry, John Mutorwa and copied to minister of finance Calle Shlettwein and //Karas governor Lucia Basson.

In the letter, Salini warns government "of serious consequences that will shortly arise if the current financial situation cannot be resolved".

The consequences are possible lay-offs of workers, breakdown in relationships with suppliers and subcontractors and the costly overall delay in the delivery of the project.

Last week, the company reduced operational hours of the 2 500 odd workforce from 24 hours to 15 hours a day.

In the letter, Salini explains that the impact of a full interruption on the project is being mitigated by the carrying out of minor work with materials already bought.

The outstanding amounts are N$82 million on a previous invoice paid partially by government plus N$150 million already 20 days overdue on the current invoice and N$164 million due on 21 September.

"Considering the now critical situation on the project, we request that urgent attention be given to resolving the issues relating to the financing of Neckartal Dam," Salini said.

It also requested the issuance of a definitive payment plan of the due amounts and a firm commitment regarding the timely disbursement of future payments.

"However, it is critical that a substantial payment is received in the very near future to allow works to recommence," Salini wrote. In addition to the dam's cash flow problems, the initial project cost of N$2,8 billion has already ballooned to over N$3 billion and is expected to reach N$5 billion by the end of construction.

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