By Tileni Mongudhi, Mathias Haufiku | 21 June 2019
The Namibian understands that apart from the high price, the finance ministry also flagged the transaction because the Ministry of Justice allegedly failed to follow correct procedures.
The property, Erf 8351, is situated at the corner of Feld and Lossen streets close to Ausspannplatz near the United States embassy, and has been rented by the ombudsman’s office since 2008.
A communication in March 2019 by the Ministry of Justice shows that they asked for funds to pay for the transaction, but the application was turned down. The finance ministry noted that it was done without the signature of the justice ministry’s financial adviser.
“I can confirm that treasury questioned the pricing of the building, and we are still awaiting the answers. No approval has been given so far,” finance minister Calle Schlettwein told The Namibian on Wednesday.
The finance ministry also made it clear that it will not consider the valuation of N$26,3 million done by private companies or individuals.
Rather, it will consider the valuation of N$12,2 million by the government’s property evaluators, according to official documents seen by The Namibian.
The justice ministry was reportedly informed that its submission would only be considered if it complied with internal procedures, and if it reduced the inflated price.
Finance ministry sources said the justice ministry had budgeted for the building as part of their development plans.
It was approved by the National Planning Commission, which is responsible for all government development and capital project budgets.
In line with central government protocols on the acquisition of land and property, the finance ministry needs to grant final approval for such transactions.
In this case, treasury believes the government is being disadvantaged.
The Deeds Registry shows that the property belongs to Exclusive Linen Close Corporation, which was owned by property developer Hendrik Derks.
Derks bought the 1 248-square-metre property for N$3 million in 2005.
Derks said he sold Exclusive Linen Close Corporation – which owns the property – to Etienne Weakley for N$8,5 million.
Exclusive Linen director Gerard Swartz confirmed negotiations about this transaction.
“Yes, we had discussions with the ministry regarding that transaction, but the deal is off,” he said.
Asked about the alleged high price of the property, Swartz responded that “it is a private transaction”.
Ombudsman John Walters yesterday said the process to purchase the property was set in motion last year, and indicated that he is keen to see the transaction finalised before his term of office expires in two years.
Walters noted that he is aware that treasury has an issue with the asking price for the building.
“The office of the ombudsman is turning 30 years soon. It’s regrettable that we still do not have our own property,” he said.
Details of the failed N$26,3 million deal comes a few months after the government abandoned initial plans for a partnership with a private company after the justice ministry opted to buy the overpriced building instead.
Over the years, the Ministry of Justice has struggled with office space, and has often been forced to rent offices across the city at inflated charges.
“Please direct the questions to the executive director: Ministry of Justice, Issaskar Ndjoze, or deputy executive director Gladice Pickering. As minister, I have no role in procurement matters,” he told The Namibian yesterday.
Questions sent to Ndjoze were not answered.
In 2017, The Namibian reported that the justice ministry entered a controversial lease agreement with a company belonging to property developer Erastus ‘Chicco’ Shapumba.
The government paid N$470 000 a month in rent, a figure considered astronomical. The said offices were used to house the prosecutor general’s office.
The proposal by the justice ministry comes years after the government has splashed billions on offices.
In 2015, The Namibian reported that the government wanted to spend over N$4 billion on building ministerial head offices, while at the same time shelling out over N$1 billion in office rent over three years.
Some of the projects were never implemented because of a lack of funds.
Economist Rowland Brown, co-founder of financial services company Cirrus Capital, warned at the time that the rush for ministerial offices in Windhoek was a result of the ballooning civil service which required additional floor space, vehicles, utilities, travel and subsistence allowances, and other support funding.
“Many of these buildings do not come cheap, and very much break the mould of government buildings, often being excessively lavish and extravagant, considering their role and purpose,” he stated.
Ministry of Justice responds:
1. The property was valuated by three valuators, including the Ministry of Land Reform, whose valuation was the lowest. The two private valuators motivated their valuations, while the land reform ministry did not do so.
2. The owner did not accept this valuation of land reform ministry as it was considered too low.
3. As a result, we entered into negotiations to agree on the purchase amount in light of the different valuations.
4. The amount agreed on was the result of a compromise between the seller’s demands and the different valuations.
5. The building is currently occupied by the ombudsman on a lease agreement, which is administered by the ministry of works on behalf of Ministry of Justice. The ombudsman, administratively, falls under the Ministry of Justice.