Tilahun fights for desalination plant

November 14, 2014, 9:11am

Tilahun fights for desalination plant

AN ugly fight over the ownership of the desalination plant in the Erongo region that was built by uranium company Areva five years ago heads to the High Court.
The plant is located at Wlotzkasbaken, 30 km north of Swakopmund.
French state-owned Areva spent N$1,9 billion on the plant, which was supposed to ease the shortage of water faced by mining companies at the coast. Areva and the United Africa Group, headed by prominent businessman Haddis Tilahun, are fighting over a supposed stake which United Africa says it owns in the plant. Tilahun confirmed that the matter is headed for court without giving details.
“We are unable to respond to your questions point by point, other than to confirm that the matter is sub judice,” Tilahun said on Wednesday.
Hilifa Mbako, Areva's country manager, declined to comment, referring the matter to Areva in France. 
“We can confirm a dispute, but will not elaborate on its ground as it is currently in court. We are therefore not able to provide more details on this dispute, but we can confirm that the Erongo desalination plant is fully owned by Areva Resources Namibia (a company 100% owned by Areva),” said Katherine Berezowskyj of the Areva press office in Paris. 
Berezowskyj said United Africa never acquired any stake in the plant and, consequently, never paid any amount. “Areva can confirm that the Namibian government is not cited. We had an agreement with United Africa that never came into force. United Africa wanted to open new discussions, which Areva declined,” Berezowskyj said. The plant has a capacity of 20 million-cubic-metres, which Areva built with initial plans to secure supplies for its Trekkopje uranium project that was put under care and maintenance in 2012 due to low nuclear fuel prices.
The surplus water was to be sold to other mines and municipalities in the region.
Sources said when Areva built the plant, United Africa Group joined the project as a local partner but now Areva says they never paid money to legalise its stake in the plant as was agreed.
Areva is said to be sticking to its guns that the period during which United Africa Group was supposed to have paid had lapsed and they have a zero stake in the plant.
BOILING WATER
During a recent visit to China, Minister of Mines and Energy Isak Katali announced that the government was planning to buy the plant from Areva to secure water supply to the mining companies in Erongo, including the Chinese-owned Husab mine.
Katali told Nampa at the time that discussions over the sale were in full swing.
The announcement is said to have poured 'boiling water' on an already steaming dispute, with the United Africa Group demanding a share of the money from its stake when the government buys the plant, or else it will pursue a legal recourse.
Areva has offered the plant to the government at a discounted value of N$3 billion - N$2 billion below the market value of N$5 billion; a source close to NamWater and the Ministry of Agriculture, Water and Forestry said.
Areva and the mining companies have had a dispute over the desalinated water, which the companies said was over-priced. This has led to NamWater and Rössing Uranium considering setting up their own desalination plants.
“Areva does not have the necessary information to comment on the water price paid by the mining companies as Areva only has a contract with Namwater. Regarding the price contracted with Namwater, it is a fair price based on the cost of the plant,” Berezowskyj said. 

BITTER TASTE
Although both Mbako and Tilahun were economical with details of the dispute, The Namibian gathered from sources in the mining industry that the Erongo Desalination Company, which was supposed to be a joint venture between the two companies, was never formerly established because United Africa Group failed to pay for its 50% stake. United Africa Group also failed to meet three conditions that were set as part of the agreement, the sources said.
“After three years of silence and the initial agreement having lapsed, Tilahun suddenly wants the agreement to be revived and Areva is refusing because it is a state-owned company, which has to follow procedures set by the French government,” a mining source, who appeared to be siding with Areva, said. “Tilahun never paid a cent,” the source claimed.
Chamwe Kaira: The Namibian