Profiteering from politics of water

Information about the deal between the government and Areva remain secretive, but acting permanent secretary in the ministry of agriculture Abraham Nehemia confirmed to The Namibian that they are close to making a Cabinet submission on the proposed deal.
The Erongo Desalination Plant, known as the Areva plant, is 30 kilometres north of Swakopmund and produces desalinated water for Erongo region,

The Namibian understands that the government is insisting on buying the Areva plant to regain total monopoly over water provision to the country. In fact, agriculture minister John Mutorwa believes that it’s a now or never option to buy the plant. Three weeks ago, The Namibian reported that Mutorwa’s ministry blocked Rössing Uranium mine from setting up its own water plant at a cost of N$200 million.

Informants said the use of the Areva water plant has already led to job losses at companies like Rössing which suddenly found itself paying more than N$140 million for the same amount of water it was paying N$39 million before 2013 when NamWater was getting its supply from Omdel, an aquifer situated 40 km east of Henties Bay, which supplies Swakopmund, Walvis Bay, Rössing mine, Arandis and other areas in the vicinity.

Areva has refused to provide the exact amount that it paid to set up the plant. The Namibian reported in 2009 that an environmental assessment said the facility will cost N$1,8 billion.

The plant that was inaugurated in 2010 is now being sold for a reported fee of N$3, 5billion. The secrecy over the amount spent has led to further speculation that the plant was set up cheaply to be sold to the government for a reported fee of N$3,5 billion – which would be equal to a N$1,7 billion profit for the French company.

A report compiled by NamWater’s manager of engineering Kuiri Tjipangandjara warned the government not to buy the plant saying it would be cheaper and better to construct a new plant. He said the government could spend close to N$3,5 billion to buy Areva’s plant.

NamWater is one of the key entities involved in negotiating with Areva and that’s how Tjipangandjara comes into the equation because he is part of government’s team. Tjipangandjara said the government can set up a new desalination plant for N$1,7 billion instead of splashing N$3,5 billion on the Areva plant.

“This is a small amount compared to what the government would have spent if it were to purchase and retrofit the Areva plant,” he said.

Beside the N$1,7 billion, the water engineer said the government can use an additional N$500 million to build another desalination plant producing 10mm3 per year which would cover the shortage of water after the construction of the main water plant.

AREVA RESPONDS

Areva Namibia’s managing director Hilifa Mbako denied allegations that they want to sell the plant for N$3,5 billion saying that amount is “hugely above the investment made by Areva for the plant”. Mbako declined to provide the exact amount they spent on the construction of the plant nor the total amount that they made from selling water since 2010.

He said the sale of the plant to the government is to recover the capital invested. “No profit will be made on this transaction,” he told The Namibian.

The ownership of the Areva plant is also a subject of a tug of war between the French and United Africa Group, a Namibian outfit owned by Martha Namundjebo-Tilahun and Haddis Tilahun who are insisting that they co-own the plant.
TheTilahuns who are claiming to be elbowed out of the deal are accused by Areva sources of not “spending a cent” on the project. Tilahun declined to comment because their case is set to be in court next month.

Mbako said”we confirm that UAG are not a shareholder of Areva desalination plant which belongs 100% to Areva Resources Namibia”. Tjipangandjara said the ownership battle could delay the government’s bid to solve the water crisis at the coast.

RISKY DEAL

Tjipangandjara said the Areva plant is also risky because of the quantity of water since the plant was built for Areva’s suspended Trekkopje mine and not for general water supply.

He insisted that the cost of water from Areva will be a burden to water consumers who will pay a higher price if government does not subsidise the water from the Areva plant after it is purchased. “Without subsidy from government, it (water)will be unaffordable to the mines, other industries, and the local authorities,” he said.

NamWater’s spokesperson Johannes Shigwedha told The Namibian that a tender was advertised through the Tender Board of Namibia to build a desalination plant but this process was cancelled because all the bids did not meet requirements.
The decision by the government to buy the Areva plant also exposes the state on how it has given the French parastatal preferential treatment to build a water plant while blocking others like Rössing.

Areva came to Namibia in controversial circumstances, notably in a dodgy transaction that roped in President Hage Geingob as a ‘consultant’ to help UraMin (a company later bought out by Areva) to acquire mining licences. He admitted that he was paid N$3 million for that job even though he passed on N$2 million to someone else for reasons he is yet to disclose.

As trade minister, Geingob and former Areva chief executive Anne Lauvergeon inaugurated the Areva plant in 2010. Lauvergeon who is known as ‘Toxic Anne’ in France was in charge of the French nuclear giant when Areva paid U$2, 5 billion in 2007 for UraMin– the same deal which saw Geingob pocket millions of dollars as a middleman. Lauvergeon denied any wrongdoing but investigations into that deal is ongoing in her homeland.

* This story is produced by The Namibian’s investigative desk.