Published on October 5th, 2009 | by admin0
Plans to reduce the threat of floods in the north and the use of a trust fund for regional development are raising clouds of suspicion, reports Tangeni Amupadhi
In the government setup, Erastus Negonga, the Permanent Secretary for the Ministry of Regional and Local Government, Housing and Rural Development, is perceived as an untouchable, even though he breaks rules and gets away with questionable management.
His work is under the spotlight again, several years after he left the Ministry of Defence when government lost N$3 million in a dubious arms deal.
The latest issue has gone as far as the Office of the President and Cabinet where a multi-billion dollar project to revamp Oshakati has stalled because of suspicions that Negonga favoured one company over others. He has denied the allegations. [see separate interview]
Negonga is also at the centre of controversy concerning the handling of millions of dollars kept in an obscure trust fund of the ministry.
The Auditor General has uncovered massive irregularities in the financial transactions of the trust fund, which has had only one audit undertaken since its inception nine years ago. A parliamentary committee recently pointed to several loopholes that call into question the governance of the trust fund. Negonga has been accused of sending most of the money to certain regions, including the area he originated from as well as favouring certain companies for contracts. Negonga has dismissed the accusations as mere “lies”.
Following the efundja (flooding) in the northern regions of Ohangwena, Omusati, Oshana and Oshikoto, Negonga was dispatched last year to co-ordinate the government’s emergency relief programme.
Towards the end of last year, the Oshakati municipality awarded a contract to Van de Vijver Holdings to design the “concept plan” for storm water. His ministry paid nearly N$5 million for that concept plan. Several sources have said that Van de Vijver Holdings had at least two meetings with with Oshakati councillors (one at a hotel in Ondangwa and another in Oshakati) before tenders were advertised for the concept design. Oshakati Mayor Katrina Shimbulu confirmed the meetings but told insight Van de Vijver had long ago presented ideas to them about solving the efundja problem.
Negonga said the proposal from Van de Vijver Holdings was the most superior of the eight bids, especially because they brought in Belgian planners whose expertise and experience in designing dykes, diverting rivers and managing massive flooding is extensive.
“If we were favoured, it was only because of the expertise we put on the table,” said Werner Beddies, Chief Executive Officer for Van de Vijver Holdings and Leading Lodges of Africa. Van de Vijver Holdings is owned by Paul van de Vijver and his two sons. The Belgian nationals’ business is best known for its array of top class tourism facilities.
insight understands that the Regional and Local Government Minister Jerry Ekandjo took the “Concept Master Plan” to the Cabinet but quickly withdrew it after several concerns were raised. Ekandjo has denied to insight that he had made the submission but preferred that Negonga answer questions. Negonga said the matter is with the Cabinet but could not say what the hold up was.
The “Master Plan” for Oshakati required “in principle” approval by the central government because it will cost a huge amount of money and will be implemented over three to five years, said Negonga. He added that it could cost the state about N$1.6 billion, but others said an extension of the project to other parts of northern Namibia may cost N$10 billion and take 15 years to complete. The main suspicion is that the contract will be awarded without tender to Belgian consultants. Beddies said they prefer open bids and that there will be enough work for many companies.
Apart from the ministry’s funds Negonga was equally dismissive of accusations that he often used the Trust Fund for Regional Development and Equity Provisions as he wished. The Trust Fund was set up to fund development in regions and towns. The emphasis appears to be on “equitable” funding for under-developed regions and towns. An average of N$30 million a year has been placed in the trust fund’s account since 2002 and the account is held in a private bank.
But criteria for the allocation of funds is non-existent. For instance, money has been paid to develop a hot spring tourism project at Warmbad (N$2.7 million), a new town at Outapi (N$25 million), millions more to bail-out local authorities, houses for war veterans (N$1.5 million). About N$10 million will be used to build offices for the Council of Traditional Leaders/Authorities. Even a request was put forward to by shares in Cell One. Most of the money has gone into repairing sewerage systems such as at Rundu (N$42 million), Oshakati (N$29 million), and Gibeon (N$20 million). But its mainly one company (Preferred Management Services, formerly Hanover) that has been hired without tender to implement projects worth more than N$130 million, over a third of the trust funds’ income. The company has built up experience in new towns over the years.
One man show
People with the knowledge of the working of the fund say Negonga and an official in the ministry he hand-picked to do the administration preside handle funding requests. The two handle all paper work, leaving loopholes for irregularities.
Negonga says although he is the chairman, decisions are taken by the full board of trustees. Some trustees have complained about being kept in the dark. The trustees include three other permanent secretaries, two governors, two local authority councillors, a representative of disabled people and a representative of NGOs.
Auditor-General Junias Kandjeke was scathing about Negonga and the administration of the fund while citing irregularities in the only audit report so far tabled in the National Assembly. Kandjeke’s report was handed to the lawmakers in September, well out of date as it concerns the 2002 and 2003 financial years. Kandjeke was scathing of Negonga: There is only one person who performs all duties from the finance department to administration; no minutes of board meetings were available for auditing; original cheques to the value of N$2.9 million and bank statements to the amount of N$20 million have not been submitted; The Trust Fund has no fixed assets though it had purchased assets for regional, town and village councils “but there are no supporting documents indicating the names of the entities to whom the assets were given”.
Negonga insists they adhere to good governance. He denies misuse of the trust or ministry’s money, including an allegation that a sports stadium was built at his village, Uukwangula, about 20km outside Oshakati. He said the stadium was built by the regional council for up to N$20 million. This is despite that the stadium in the densely populated Oshakati is not up to international standards.
The National Assembly’s Committee on Constitutional and Legal Affairs went around the country to ask about the activities of the fund. It concluded, in a preliminary report, that most regional and local authorities leadership are not aware of the fund; that there was no polic, procedures or criteria; the ministry did not tell the regions and local authorities whether the money they give comes from the fund or its main budget; the funding suggests a preferential treatment of some regions; and there is a “lack of transparency and accountability”. New administrative structures are being set up to, hopefully, run the fund better. But several politicians have complained that bureaucrats like Negonga find it easy to ignore them because there are no mechanisms to hold the government employees accountable.
Negonga responds to criticism about the Trust Fund and other issues:
EN: I don’t know where the confusion is coming from because the Regional Trust Fund and Equity Provisions was started by an Act of Parliament. The criteria of the trust fund is funding projects in line with its mandate, that is anything concerning local authorities and regional development.
There is a suggestion that you as Permanent Secretary seem to take decisions alone on how to use the funding because of the absence of guidelines and criteria?
EN: No it’s not true. The decision to allocate funding from the trust fund has got nothing to do with the ministry. It is purely the decision of the board of trustees. I’m just a chairperson and there is an executive committee of the board of trustees, which is comprised of the Permanent Secretary for the National Planning Commission, the Permanent Secretary in the Ministry of Finance, who is the Secretary of the fund, regional councils, local authorities, people with disability and NGOs. There is no way any project can go through without being approved by the full board. At no time can the ministry just apply it. At no time can myself as the PS influence the other board of trustees. How can I influence other permanent secretaries? No one in the ministry is part of the decision-making of the trust fund, except me by virtue of being the chairperson.
There is a strong suggestion that only northern parts of the country benefit?
EN: I’m not in agreement with that. Since its inception all the regions have benefited. It depends on the level of beneficiation. I can agreement that the benefits are not the same. In a nutshell I’m saying the fund has been benefiting all the regions.
I assure you and the public that this is not a one-person show. The trust fund is guided by an act of parliament and has a board of trustees. To allocate is a decision of the board of trustees. There is good governance. There is nothing wrong. All the funds in the trust fund are committed. There is no money that is not committed.
Can you address the issue of Oshakati and the floods?
EN: After the 2008 floods, as you know Oshakati was flooded. It’s a matter of re-planning Oshakati so that they can allow the relocation of people always suffering from water during floods. The plan would then provide for a dyke system, may be deepening the rivers and upgrading the bridges and so on.
This is purely the planning project of the Oshakati Town Council. It has been planning it and marketing it to stakeholders and made their own consultations. For the consultants of that plan to come out, it was advertised.
A Namibian company made the tender with a Belgian consultant. They came with the best proposals. The proposals were evaluated by the town council and by experts. Once implemented Oshakati will be no longer be flooded. Other proposals were there but they could not really come close to telling how to prevent Oshakati from flooding. It is on that basis, basing the tender on the competitiveness, that it happened to go to Van de Vijver Holdings, which is a Namibian registered company, in conjunction a Belgian consultant.
Of course, they have an advantage because they happened to use more or less the same projects in Holland where they have a lot of water there and you’d remember that Europe is a flooding area.
They were appointed in accordance with tender procedures and good technical proposals. There were eight companies. Some Namibians tendered with South Africans.
No, there was no favouritism. If you see their technical proposal and even the financial proposal, their joint proposal was the cheapest. They have the experience that we in Namibia don’t have. There was no influence at all. It was a pure, pure tendering process and assessment. And it was done at various committee levels and management. This was just a concept plan only for Oshakati. The implementation is a different thing. When we get the plan [approved] implementation will be done by the Oshakati Town Council coming up with the tendering.
Our information is that you made a Cabinet submission that the implementation be awarded to the same company. Is that correct?
EN: The Cabinet submission was for the Cabinet in principle to approve the concept plan. Not for any work. The plan was already concluded. Yes, the plan is approved by Oshakati and the stakeholders are in agreement, but it needs to be endorsed by Cabinet. Only the plan. Nothing else.
What is holding it up at Cabinet?
EN: That I don’t know. I’m not a member of Cabinet.
What is the cost of implementation? There is talk of N$1.6 billion?
EN: That amount was the estimate for the public sector [government]. If the plan is implemented for three to five years it may cost the public sector up to that amount, including the dyke system to divert the water, the deepening of the river, upgrading of bridges, compensation for people for relocation, service of the land and general planning. These are the estimates.