23 May 2018

Namibia: Mutorwa Wants RCC Bosses Fired

Works minister John Mutorwa suggested two weeks ago that the board and the chief executive of the troubled Roads Contractor Company be fired.

Details of Mutorwa's proposal to sack the top executives of the parastatal are contained in documents reviewed by The Namibian this week.

What brought this about is the RCC board and chief executive officer's move to get into a partnership with a Chinese state-owned company, Nantong Sanjian, without informing the minister.

Under the agreement, the Chinese company would give RCC N$580 million in exchange for partnering the parastatal on projects worth over N$2 billion. Documents show that Mutorwa told public enterprises minister Leon Jooste on 7 May 2018 that "you may already propose on the proper legal way to dissolve the board and replace them appropriately, as well as the dismissal of the chief executive".

The minister added: "As per my attached formal 7 May 2018 letter, nobody in his or her right mind can and/or may defend the RCC board and chief executive for having signed the agreement on 6 April 2018".

The minister said before any action should be taken, he proposed that they, as ministers, meet the attorney general to discuss the way forward.

Mutorwa confirmed the discussion to The Namibian yesterday, but insisted that due process would need to be followed to decide on the matter.

"The point is, the board agreed without consulting the line ministry and the attorney general," he stressed, adding that Kawana's legal opinion after reviewing the agreement suggested that action should be taken against the RCC leadership.

Some people have accused Mutorwa of allowing Jooste to take the lead in determining the fate of the RCC.

The works minister has been open about discussing the future of the roads parastatal when questioned by the media.

Mutorwa said he was set to meet Prime Minister Saara Kuugongelwa-Amadhila yesterday to discuss the RCC matter.

From there, the matter would be taken to Cabinet for further discussions.

"I have to put the matter through the process. I will make a public statement once we are finished," he added.

The RCC leadership is caught between a rock and a hard place, facing pressure from Mutorwa, Jooste and finance minister Calle Schlettwein, who rejected the agreement with the Chinese this month.

Although Jooste declined to comment on the matter since Cabinet was still discussing it, documents show that he wrote to Mutorwa the same day that the works minister said the RCC's top leadership should be sacked.

Jooste told Mutorwa that the RCC leadership disregarded several regulations before signing the agreement.

RCC acting chief executive Seth Herunga has been in charge of the parastatal since last year.

According to the agreement signed on 6 April 2018, the RCC sought N$580 million from Nantong Sanjian to avoid being shut down after the government said it would not bail it out.

As part of the agreement, Nantong Sanjian will give the RCC the N$580 million loan to implement its operational plans. The partnership will stretch over 14 years, and has a five-year repayment period at a 15% interest rate per year.

The arrangement also states that Nantong Sanjian would become the RCC's preferred partner on projects worth around N$2 billion.

"The repayment by the RCC to Jiangsu Nantong Sanjian shall be executed in the form of participation to the maximum of 47%, and the RCC shall execute the 53% of its current and other identified future projects for five years or earlier," the agreement states.

The 47% stake that will go to the Chinese firm is worth an estimated N$2 billion of the RCC's current projects, which are valued at N$4,1 billion.

RCC chairperson Jacobs, who has been battling to keep the RCC going, insisted this week that a legal opinion they obtained on the Chinese partnership showed that the agreement was "supported by relevant statutes, information and authority".

In a press release yesterday, Jacobs said the board does not have any official notification about the dismissal.

"It is not the first time that especially those who wanted to close the RCC were crafting plans to remove the board. We are resolute and focused on the success of the RCC".

Jacobs further said the constantly moving goalposts regarding the RCC and the persistent drumming up of every conceivable reason to do away with the RCC were not painting an objective picture and national interest.

"The self-sustaining funding solution is a milestone for the RCC. The board has expressed itself that the funding is sufficient and adequate to normalise the operations of the RCC," he stated.

According to Jacobs, the awakening of the RCC would contribute towards Namibia's economic progress.

"We cannot allow about 400 people to go home (and about 1 200 dependants, based on NSA census averages), as if they will find employment elsewhere, while our GRN projects and infrastructure implementation rate is at the current slow pace," he stressed.

Jacobs said with only 12 years left to Vision 2030, the regression on activities and mandates intended to be catalysts for growth will detrimentally affect the RCC's achievement.

"We need to focus on the ball; that of the RCC being normalised to fulfil its mandate. The success of the RCC is the success of Namibia," he said, adding that they would put the N$580 million loan to good use.

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