Salini cuts production amid money woes

05 Sep 2017 18:50pm
KEETMANSHOOP, 05 SEP (NAMPA) – Italian company Salini Impregilo has been forced to rein in production at the Neckartal Dam to trim down on costs after Government’s latest failure to settle its debts to the company.
Salini reduced work shifts from 12 hours to seven-and-a-half hours to circumvent layoffs and paying of overtime to workers and subcontractors.
The dam’s workforce of around 2 500 were informed of the company’s decision in a letter on Friday.
The company normally operates on a 24-hour schedule with two 12-hour shifts.
Company insiders told Nampa on Tuesday the Namibian Government at the beginning of September only paid a portion of an accumulated amount to Salini.
“The President [Hage Geingob] announced that all outstanding bills to contractors would be paid by the end of August, but unfortunately, this promise is not being honoured,” one source said.
Director of Water Supply and Sanitation Coordination in the Ministry of Agriculture, Water and Forestry, Leonard Niipare confirmed that only N.dollars 127 million out of N.dollars 209 million was paid to Salini.
“We are busy engaging with the Ministry of Finance to see how it can intervene to sort out the payment issue,” he said.
Niipare acknowledged that recurring labour issues and cash flow problems at Neckartal could see the delay of the project – officially set for completion at the end of 2017.
He further admitted that the initial contract amount of N.dollars 2.4 billion for the largest dam in the country could escalate.
“I cannot confirm escalations now as we have to look at final amounts, but we are confident the project will be completed, maybe later than anticipated, but definitely,” the director said.
Though Salini declined to comment, the newly-introduced working schedule is expected to last until the financial situation in the company normalises.