Namibia: Airport Road Tender U-Turn

The Roads Authority's board stopped a recommendation to award a N$950 million tender to a Chinese company to construct the second phase of the Windhoek to Hosea Kutako International Airport highway because it was too cheap.

The road agency's board has instead recommended that the tender be awarded to a seventh-ranked Chinese state-owned company called Zhong Mei Engineering Group for N$1,2 billion.

Even though this was a board recommendation and will need approval from the transport ministry and the project co-funder, the African Development Bank, there appears to be an intensive push and pull behind the scenes on who should get this project.

Some bidders claim that the continental bank rejected the recommendation to appoint Zhong Mei Engineering Group, which is linked to a wheeler-dealer Namibian businessman known for being a silent operator in tenders.

A government committee recommended Aviation Industry Corporation of China (Avic International)'s N$950 million tender. But that bid was seen as low and deliberately set to increase it later.

The roads parastatal board met on 11 July 2019 to discuss that recommendation, and blocked it.

"The board considered the bid to be abnormally low, compared to the latest cost estimate," minutes of that meeting said.

The Chinese firm said their decision to bid low is a strategy to make a lower profit margin on this project, and "careful consideration in order to gain more opportunities of entering Namibia".

To the board, this was not good enough.

"The clarification given by the bidder in question did not address the critical issues relating to the completion of the project," the RA board said.

A decision was then taken to look at the other seven bids for the same tender.

"The bids offered by Avic International Projects Limited and China State Construction Engineering Corporation to be abnormally low as they don't entirely address both the perceived and actual risk anticipated from such a huge project, also given the terrain and scope of works to be carried out," the minutes said.

The RA document said China State Construction Engineering Corporation performed poorly in another road project.

"Further owning to its poor performance on previous Roads Authority projects, the board of directors considered China State Construction Engineering Corporation a high technical risk".

China State Construction Engineering teamed up with former president Hifikepunye's Pohamba's daughter, Kaupomhote Pohamba, for that 2014 road project in question.

The RA report claimed that the joint venture failed to complete that project on time, compromised quality, and delayed the project. The company rejected this claim.

To some people familiar with this tender process, this was evidence that the roads parastatal is trying to lay a red carpet for another Chinese company ranked seventh.

According to the document, the RA's management took the lowest price offered within 20% of the lowest cost estimate [N$1,5 billion x 20% = N$1,2 billion].

"The Roads Authority, therefore, resolved to approve the award of the above bid to Zhong Mei Engineering Group as they were determined to be the lowest evaluated, substantially responsive, and qualified bidder among the remaining bidders," the board said.

Phase one of the Windhoek-Hosea Kutako International Airport road stretches from Mandume Ndemufayo Avenue to Sam Nujoma Drive.

Companies are now scrambling for the next phase from Windhoek to the Dordabis turn-off, but the tender process is already muddled with controversy, including the alleged greasing of palms.

Roads Authority spokesperson, Hileni Fillemon declined to comment on the matter. She referred The Namibian to answers she provided last month.

At the time, she said, "the process for the appointment of a contractor for phase 2A of the Windhoek-Hosea Kutako International Airport road upgrade is still ongoing. Thus, information will be released only after this process is complete".

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