By Tileni Mongudhi and Mathias Haufiku | 10 March 2020
TRANSPORT executive director Willem Goeiemann wants the government to give control of the newly constructed N$4,2 billion Walvis Bay container terminal to a Dubai state-owned company for 30 to 50 years.
Documents seen by The Namibian show that Goeiemann favours a company called DP World, previously known as Dubai Ports Authority.
The same emirates company had partnered with real estate dealer Titus Nakuumba in another questionable state land transaction.
The Namibian Ports Authority (Namport) rejected Goeiemann’s recommendation, warning that it lacked procurement transparency and could impact Namport’s future.
The government borrowed N$2,9 billion from the African Development Bank to partly fund the construction of the new port terminal at Walvis Bay to increase Namibia’s logistic hub dream.
The new terminal would double the port’s handling capacity from 350 000 to 750 000 containers per year.
Now Goeiemann – who is set to retire this month – is using the economic downturn as reason to hand-pick a private company to run the new terminal for decades.
Goeiemann is using Namibia’s diplomatic ties with the United Arab Emirates to push through the deal.
“The governments of Namibia and the United Arab Emirates have an existing bilateral agreement which includes logistical cooperation which allows for government-to-goverment agreements,” he said in a draft Cabinet submission dated February 2020.
The submission contains key components of the proposed state-to-state partnership to allow DP World to manage the new container terminal.
The ministry’s move comes three months after DP World submitted an uninvited expression of interest to operate the container terminal.
The move also contradicts the ministry’s decision to first conduct a feasibility study before deciding how the terminal can be run.
The proposed partnership, according to Goeiemann, is prompted by the alleged decline in cargo volume output “which places the business sustainability of the port at risk”.
“It is thus deemed necessary to take strategic actions to avert the detrimental state. The government plans to enter a partnership for the management and operation concessionary contractual for the port of Walvis Bay’s new container terminal with Dubai Port World – a state-owned enterprise,” Goeiemann said.
Goeiemann, in his memo, said following the public procurement and public private partnership laws could delay the port transaction.
“It is transshipment volumes that suggest faster and more decisive action are required so as to mitigate the imminent financial risk the government is faced with for the new container terminal as guarantor,” he said.
Goeiemann said he will not respond to questions sent by The Namibian.
“All I can say is that no decision has been made, these are internal consultations that are ongoing and you will be informed once the process has been concluded,” he said yesterday.
HOLD THE HORSES
Namport responded to Goeiemann on 26 February 2020:
“The draft Cabinet submission, with the greatest respect, unfortunately paints a picture which is not reflective of the facts as pertaining to Namport’s current and forecast financial position.
“It is our considered and humble submission that this approach has the serious potential of usurping the powers from those that you have asked with running the business and that could be the overall detriment of the future of the organisation,” wrote Namport board chairman Gerson Hinda.
Hinda warned that hand-picking an operator can cause legal and reputational risk for Namport globally.
He also indicated that in the absence of a detailed feasibility study, Namport would be on a serious back foot in any negotiations with DP World.
Namport also questioned the impact on the job security of workers, should control of the terminal be given to DP World.
DP World and Hong Kong firm Hutchison Ports are some of the global port operating giants that had approached the government to run the terminal.
Hinda confirmed to The Namibian on Monday that he had written to the transport ministry.
“Yes, we wrote to the ministry as a board. At this point I cannot divulge the contents of our correspondence. Please contact the line ministry for further information,” said the board chair.
The Dubai transaction appears to be linked to another state deal at the coast, which sources suspect is part of the puzzle.
The Namibian reported last week that trade minister Tjekero Tweya approved a deal to sell a portion of state land at Walvis Bay, valued at N$8 million, to a consortium that includes DP World and businessman Titus Nakuumba.
Goeiemann used that transaction as another reason to push through the port agreement and that it is a backbone of the industrial deal signed-off by Tweya.
Namport’s board chair, however, rejected this.
Hinda said the success of the partnership between DP World and !Nara Namib Free Economic Zone does not necessarily require the operation of the terminal by DP World because “Namport is well-placed and able to handle such volumes as may be required in the free economic [zone]”.
DP World has presented a basket full of promises if an agreement with Namport is approved.
DP World promised to guarantee any outstanding loan Namport incurred for the construction of the container terminal on an annual basis.
It also committed to pay annual concession fees to Namport as well as dividends to Namport based on the authority’s shareholding.
The Dubai firm also committed to pay Namport for the concessionary rights upon signature of the concession agreement for 30 to 50 years.
Namport spent N$4,2 billion to construct the new container terminal with N$337 million directly coming from the government, African Development Bank N$2,9 billion and Namport’s own funding of N$881 million.
This is not the first mega industrial project linked to DP World.