Government delays payment to Salini

19 Sep 2017 17:30pm
KEETMANSHOOP, 19 SEP (NAMPA) – Government has deferred a decision to resolve the financial crisis at Neckartal Dam to next week.
This comes after Minister of Agriculture, Water and Forestry, John Mutorwa informed Salini at Neckartal Dam on Friday that the cash flow problems would likely be solved this week.
Salini Impregilo is the Italian contractor building the multi-billion dollar Neckartal Dam in the Berseba Constituency in the//Kharas Region.
Government owes the company N.dollars 600 million in back payment, while further funds are needed to complete the remaining 10 per cent of work on the project.
In a statement on Tuesday, Mutorwa said the Cabinet Committee on Treasury (CCT), in a meeting this Monday, put together a Technical Committee (TC) to locate the money.
“The TC was put together to urgently work on detailed and specific possible financing modalities and to report back to the Committee of Ministers on 25 September 2017,” the minister said.
The TC is made up of officials from the Ministries of Finance, Agriculture, Public Enterprises, National Planning Commission, and Namibia Water Corporation (NamWater).
In a meeting with Salini on Friday, Mutorwa indicated that NamWater would be approached to pay the overdue invoices for May, June, July and August totaling N.dollars 600 million. However, late Sunday, the minister informed Nampa that his ministry, in fact, would be responsible for sourcing the outstanding amount and that NamWater would be approached to take over funding on the 10 per cent of work remaining on the project.
The reasoning behind roping in NamWater is that the dam would be on the books of the parastatal as an asset once completed.
The proposal was to request NamWater to borrow money and that this loan would be backed by a Government guarantee.
“The TC’s expected recommendations will then be served at the CCT meeting on 27 September 2017,” Mutorwa’s statement said.
He said further details on the financing matter would only be available after the CCT has met.
The CCT is also expected to report on the matter to the entire Cabinet after its 27 September meeting, Mutorwa added.
Work at Neckartal, meanwhile, has come to an almost complete standstill since the end of August when the company sent around 90 per cent of the workforce home.
Salini Project Manager Fabrizio Lazzarin in the meeting with Mutorwa SAID that work would only commence once payment has been effected.
Only essential minor works are currently conducted at the dam.