Namibia: Dutch Company Hand-Picked for Nampower's N$25m Job

17 September 2018

NAMPOWER hand-picked a Netherlands-based company, Prysmian, to supply power cables worth between N$20 and N$25 million after undertaking a scouting mission to Europe in February last year.

The cables are needed for the N$40 million 132kV Hippo substation, whose tender was awarded to the Consolidated Power Engineering Namibia Company (Conco) on 10 October 2016.

Conco is co-owned by businessman Leake Hangala, a former NamPower managing director, who owns a 20% stake in the company.

The substation has since been completed and was energised on 22 August 2018 - three months after the agreed date.

NamPower managing director Simson Haulofu, the divisional manager for transmission, AJ Vermeulen, and the chief officer for power systems development, Reiner Jagau used the emergency procurement process to push through the Prysmian deal.

Jagau wrote an internal memo on 2 March 2018 and Vermeulen signed it before it was sent to Haulofu who also appended his signature on 5 March 2018.

According to Jagau, the emergency procurement process usually follows the process of direct procurement, although initially the restricted process will be touched upon.

NamPower, Jagau said, used the emergency method because the transformers are from the 70s, and the electricity supply to the north is under threat.

"The solution to this problem has been delayed for more than two years now, so to get at least the supply, we need to commission," Jagau stated.

Both Vermeulen and Jagau, in the drafted memo, said failure to acquire the cables would impact on the supply of electricity in the northern parts of the country.

"The risk of coupling transformers in service failure is extremely high. A breakdown of any one or both of the coupling transformers will impact on the supply of electricity to large parts of the north, including Outapi, Etunda, Calueque (water supply to the north), Ondjiva (RNT), Opuwo and station auxiliary supply to the Ruacana power station for extended durations.

"This will seriously compromise the quality of life of the affected population, and requires extensive emergency work to provide auxiliary supply to the power station as it will not be feasible to operate the emergency diesel generators for an extended period," the motivation in the memo to buy the cables reads.

Jagau told The Namibian recently Nampower's technical and procurement staff visited three factories - NKT in Germany, Brugg in Switzerland and Prysmian of The Netherlands - and eventually decided on Prysmian because Eskom SA had recommended the company.

According to Jagau, the technical and procurement people had detailed discussions and decided on Prysmian because it was agreeable to NamPower's set requirements.

Jagau confirmed that the money was approved long ago and that delivery of the cables would take months.

"Such goods take many, many months. Commission of the first set will not be before April 2019," Jagau said.

After approving the funds, Haulofu said "the risk associated with losing the two coupling transformers at Ruacana are extremely high, and NamPower cannot afford this calamity".

Nobody from NamPower could provide a tender number for giving the job to Prysmian.

When asked for the contract or tender number, Jagau said "there is none".

The sources also questioned the use of the emergency procurement process to acquire cables in June 2017 that would be delivered in April 2019.

"Is this really an emergency then? In the meantime, how much is Conco charging NamPower for standing time since the Hippo substation cannot be commissioned?" the sources asked.

The sources also questioned why NamPower would award a tender for a new substation without a plan for connecting it into the existing grid.

"The 20 - 25 million is too wide a gap to estimate. It appears NamPower did not get a definite quote for the installation of the cables. This leaves room for manipulation as the cost can even go to N$30 million if there is not a signed-off quote," the sources said.

Jagau, however, said Conco has nothing to do with the cables and that the Hippo station was commissioned recently with a few outstanding snags to be resolved.

"They (Conco) have finished. Prysmian is responsible to connect the extra high voltage cables next year," Jagau said yetserday, adding that Hippo was energised on 22 August 2018.

NamPower board chair Kauna Ndilula said the board had approved all bids.

"The Hippo 132kV switching station bid was awarded to Conco Namibia in 2016 and is nearing completion. The original Hippo budget has not been adjusted, nor has Conco's work been extended/increased as alleged. All the other work has been budgeted for," Ndilula said.

Energy minister Tom Alweendo initially said he did not know anything about NamPower projects yet and had to request for "an explanation from NamPower".

Alweendo later said that after his request, NamPower officials had given him the same explanation they gave to The Namibian.

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