NHE sued for N$102m
June 24, 2015, 7:38am
NHE sued for N$102m
A COMPANY that received a mass housing contract worth close to N$800 million is now suing the National Housing Enterprise for more than N$102 million owed to it.
A civil case in which Power-Oyeno Construction is suing the NHE and the minister of urban and rural development - the minister responsible for the mass housing programme - for N$101,99 million was filed at the Windhoek High Court last week.
Power-Oyeno Construction was awarded a contract to build 2 034 houses at Swakopmund for the NHE at a total cost of N$796,3 million, the company states in the case documents lodged at the court.
The company is alleging that the NHE has been breaching the contract signed between the two parties in January last year by failing to pay on time.
NHE's overdue payments to the company since late last year have been accumulating to reach a total amount of N$80 million by the end of May, and will total just short of N$102 million by the end of June, the company is claiming.
Power-Oyeno Construction is also claiming that in terms of its agreement with the NHE the parastatal had to pay it within 28 days after the company had submitted payment certificates to the NHE.
However, by the end of last year the NHE was in arrears to the amount of N$23,9 million with payments to the company, Power-Oyeno Construction alleges.
The parastatal also owes the company N$21,4 million on invoices dating from January and February this year, N$19,9 million on invoices dating from March, N$15,7 million on invoices from April, and N$20,9 million on invoices from May, the company is claiming.
A letter which the NHE's chief executive officer, Vinson Hailulu, wrote to Power-Oyeno Construction's managing director, Paulo Shipoke, early this month, forms part of the documents filed at the court.
In the letter, Hailulu informed Shipoke that the minister of urban and rural development had directed the board of directors of the NHE to put the construction of all types of houses under the mass housing development programme on hold until further notice.
Hailulu instructed Shipoke to “temporarily suspend” his company's work on the houses it had been contracted to build at Swakopmund.
He also stated in his letter that the NHE is “just an implementing agency of the government” for the mass housing programme and that the minister of urban and rural development has the ultimate and final decision on the matter.
In the claim lodged at the court, Power-Oyeno Construction is alleging that the minister of urban and rural development instructed the NHE without lawful justification to breach its contract with the company, and that as a result of this, the company has suffered damages amounting to N$101,99 million, which is money that the NHE owes the company and it cannot recover from the parastatal.
The NHE and the minister have to notify the court within 20 days after the summons in the case had been served on them whether they plan to defend the legal action being taken against them.
The lack of payment by NHE to Power-Oyeno is a reflection of the financially troubled mass housing project.
The shortage of funds to pay contractors came after NHE failed to raise N$2 billion it needs to fund the bulk of the mass housing project - a situation that has exposed contractors to massive debts.
NHE has so far failed to pay over N$200 million to its contractors countrywide. Some contractors prefer to wait until the project is resurrected in two months' time, while others have decided to take the government to court.
Sources at Power-Oyeno said the company has been given until Friday to pay its suppliers or risk having its assets attached in order to pay creditors.