Namibia: Tender Board Awards N$300 Million Diamond Deal

The Central Procurement Board has awarded a N$300 million contract to Gem Diamonds Namibia to valuate Namdeb diamonds over the next five years.

The mines ministry appoints a government diamond valuator to ensure that Namibian diamonds are not sold cheaply. However, there are concerns that this tender was turned into a money-making scheme for a clique of well-placed individuals.

Central Procurement Board (CPB), Patrick Swartz, confirmed awarding the tender yesterday.

Sources said there was a stand-off at the tender agency on who should get the contract.

There are allegations that Gem Diamonds - which scored 100% on all tender scores - was favoured by a clique of officials, despite asking for around N$80 million more than the price of the current tender holder.

The Windhoek Observer reported two weeks ago that Gem Diamonds is "linked to a politician and a government minister". Information from the Business and Intellectual Property Authority (Bipa) shows that Gem Diamonds Namibia's director is David Shimwino. Efforts to get comment from him were unsuccessful.

Swartz said the process requires that they keep the information confidential until a decision to award is made.

The Namibian understands that some people linked to Gem Diamonds are known to have benefited from deals at state entities such as Fishcor, Namdia and the Namibia Diamond Trading Company (NDTC).

Gem Diamonds, which reportedly listed five officials from the NDTC as their diamond experts, asked for N$300 million to valuate Namdeb diamonds, while the current tender holder since 2007, Global Diamond Valuators Namibia, asked for N$220 million for the same job.

Global Diamond Valuators was ranked sixth among the bidders by the tender board's bid evaluation committee. Documents seen by The Namibian show that the tender agency's bid evaluation committee had shortlisted seven companies.

The top three shortlisted companies were Gem Diamonds Namibia, which scored 100%; Prestige Diamond Services, which asked for N$230 million and scored 97,5%; and Ondjarera Diamond Valuators which asked for N$184 million and scored 89,5%.

The others were Kings Diamond Valuations (87,5%), Welwitschia Diamond Valuers (84,25%), Global Diamond Valuators Namibia (81,25%) and Metcor Diamonds (63,13%).

The board's decision to give the contract to Gem Diamonds is a U-turn from a recommendation made in December by the tender agency's bid evaluation committee to award the deal to another alleged well-connected company called Prestige Diamond Services.

The CPB rejected the recommendation by the bid evaluation committee last year after it questioned how they picked Prestige Diamond Services, despite being ranked second.

The CPB's decision to opt for Gem Diamonds Namibia could trigger complaints and possible appeals from the companies which lost out on the tender. Some bidding firms complained to their associates that several companies were allegedly penalised or lost points for offering low bids or free services to the government to valuate the diamonds.

The government diamond valuator receives and values the diamonds from the entire production line of Namdeb, which is jointly owned by the government and De Beers.

The diamonds are then passed on to NDTC - a joint venture between the government and De Beers.

NDTC then supplies 85% of the diamonds to special customers called sight holders, while 15% is sent to Namib Desert Diamonds (Namdia).

The diamonds are, according to calculations, worth a total N$10 billion a year. The state introduced the government evaluation contract to make sure that it is not underpaid from the sale of its diamonds.

The Namibian reported last year that 11 companies submitted bids for this tender, which is described by people familiar with the trade as "fee" since they "hardly" contradict the price of diamonds that they evaluate since it is their main goal to check whether the government is getting its fair share.

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