Chinese Soft Loans and Other Corruption Schemes

A FEW years ago a certain ministry was approached by a Chinese construction firm to build certain buildings that were shown on a master plan prepared by local architects.

The Chinese firm offered a “soft loan” and gave the total figure of N$0,5 billion. This was without doubt done with some “local element” lobbying.

Luckily, at the same time, a corruption scandal rocked the same ministry and the minister, being once bitten twice shy, asked a local quantity surveyor to do an estimate of the costs if these buildings were to be done by local contractors.

When the Chinese firm got wind of this quantity surveyor’s involvement, they submitted a revised cost of N$380 million. The quantity surveyors tabled their cost estimate shortly afterwards at N$280 million.

Any financially literate person will be able to tell you that this would boil down to the fact that the “soft loan” effectively was equivalent to a loan of around 11 percent over a mortgage period of 20 years. The ministry could have done better with a local bank loan.

On top of that the buildings would be full of foreign equipment and “non-Southern African” standard installations.

But without doubt the few players who “facilitated” the business would have their Ferraris and Maseratis. I wonder if the owners of these cars (or their dads) sleep well at night.

It is in the national interest that these Chinese deals be stopped. They cost the taxpayers millions and these crooks are helping to make the poor even poorer.

Anonymous, (Real name provided)

Source : New Era