16 August 2018

Namibia: Govt Loses Millions in Funeral Tender

THE poverty eradication ministry last month extended Hollard Life Namibia's contract to pay out funeral benefits for eight months, despite evidence that the state could have saved millions by cutting out the private company.

Hollard Life Namibia got the funeral tender from the labour ministry in 2013 when current Cabinet secretary George Simataa was the permanent secretary.

Documents seen by The Namibian show that the government has paid the company N$197 million since 2013, and that Hollard paid out claims worth N$103 million. This means Hollard made N$94 million profit since 2013.

The extension of the contract by eight months was done after the former poverty eradication permanent secretary, I-Ben Nashandi, had raised concern with keeping Hollard Life Namibia on board.

Nashandi, who is now in the Prime Minister's office, wrote to the Central Procurement Board (CPB) on 21 June 2018 over the contract, saying the government could be better off without a middleman in the payment process.

In his submission, Nashandi said the government had analysed the contract with Hollard Life Namibia, especially during this time of financial troubles.

According to him, the poverty eradication ministry initiated reforms, which included consultations with the finance ministry, the attorney general's office, the Namibia Financial Institutions Supervisory Authority and Hollard Life Namibia.

"The financial implications of the current scheme were analysed, and show the potential for [the] government to realise savings if the ministry could discontinue the insurance option and instead contract undertakers to continue providing the funeral services at the same cover, but with payments done by the ministry," Nashandi explained.

"The ministry is of the view that the new proposed options would be efficient, and offer reasonable savings to the government in a time of financial constraints," he added.

The current tender involves the ministry buying funeral insurance from Hollard Life Namibia at a premium of N$17,12 per beneficiary. When a recipient passes on, a death claim is lodged with the poverty eradication ministry.

The poverty eradication ministry allows the undertaker to provide services up to a cover of N$3 200. The undertaker claims the money from Hollard Life Namibia.

According to Nashandi's letter, there were more than 211 440 beneficiaries by June this year.

Despite such concerns, the poverty eradication minister, with the approval of the CPB, decided to extend the contract with Hollard Life Namibia until March 2019 while the government develops alternatives, which include designing new forms and processes.

Sources told The Namibian that poverty eradication minister Zephania Kameeta was one of the top government officials who pushed for the extension of the contract.

The Namibian could not establish whether Kameeta and Nashandi differed on the Hollard insurance contract, but a person familiar with the matter said the two were not on good talking terms since the beginning of this year.

Kameeta, however, denied allegations that he pushed for Hollard Life Namibia to get a contract extension.

"I don't know Hollard. The company was already here when I became the minister. There were plans to transfer the responsibility to the ministry, but at the moment we can't do that. We need to be prepared to do that," Kameeta told The Namibian last month.

He, however, believes that there could be more to this saga.

"There are people in this country who are doing things. When you take the contract from this company, the company to get the tender after that, you will find that the same people are also involved in that company," he stressed.

Their relationship, sources said, was so strained that Kameeta stopped inviting Nashandi to important ministerial meetings.

Prime Minister Saara Kuugongelwa-Amadhila was also on record as saying that Nashandi, as several other permanent secretaries before him, were moved to the OPM because of their relationship with Kameeta.

Kameeta denied those claims, saying that their relationship was "peaceful and very professional".

"There was nothing personal between Mr Nashandi and me. As human beings, we treated each other with respect and professionally in the context of responsibilities given to us. Therefore, our relationship was strictly based on our work within the ministry, and that for me is not to be discussed in the media," he said.

Nashandi yesterday refused to comment on issues related to the poverty eradication ministry. He said the ministry could explain because he was concentrating on his new assignment.

Hollard Life Namibia's chief executive officer, Jaco Lamprecht, yesterday told The Namibian that they were not informed about plans to terminate their contract.

He said they had nothing to do with what the government plans to do with its resources.

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