City Loses N$12 Million in Ramatex Deal

THE Windhoek municipality lost the opportunity to collect about N$12 million in rent over the last 10 months after a textile firm, which had received the green light to buy part of Ramatex complex in Otjomuise, failed to sign the agreement.

Namusa, a joint venture between business personalities from Namibia and the United States, was given the go-ahead to buy the 38-hectare piece of commercial land – once occupied by the Malaysian textile firm Ramatex but closed in 2008 leaving about 7 000 employees without work – for N$143 million.

The Namibian understands that the bone of contention are some clauses in the contract – which have been raised 10 months after the municipality agreed to the sale.

Namusa, which promised to create 20 000 jobs at Ramatex, once described the deal as “unbelievable”.

The delay goes against a council resolution, which ordered that the deal be cancelled and the land offered to other parties if Namusa failed to agree to terms and conditions of the sale within 30 days of council’s decision.

The sale was subject to various conditions such as the payment of occupational rent on the date of the signing agreement until the transfer of land was concluded.

Namusa was expected to pay rent of N$1,2 million per month if they signed the agreement. That means the city could have raked in N$12 million over the last 10 months if the agreement had been signed in August last year. Namusa officials are blaming the municipality of not giving them the contract for scrutiny last year.

Alfred Cooper, owner of Namusa, who last year described the transaction to The Namibian as a “good deal”, has now backtracked, fuming over several clauses in the deal.

“The contract from the City of Windhoek to Namusa is not acceptable. The reasons for the delay in signing are [because of] many issues in the contract. We hope [it is sorted out] by the end of June,” he said, adding: “We have an issue with certain clauses. The contract is unbelievable.”

Cooper said one of the clauses is the payment of occupational rent, which he said will be tantamount to paying “rent on rent” since they will also pay rent to Ramatex complex owners.

He added that the company’s lawyers will engage municipality officials on how to resolve the stand-off.

The businessman said claims that they only communicated to the municipality once since last June are not true, because they have allegedly written four letters to the municipality.

Cooper also said they are negotiating with Arkansas University to set up a college to train Namibians in the garment and fashion industry. He added that they received a letter of intent with orders from American retail giant Wal-Mart.

Although Windhoek municipality chief executive officer Niilo Taapopi admitted that they had missed out on occupational rent, he defended the municipality against allegations that they only released the contract documents in March this year.

He told The Namibian yesterday that the only contact Namusa had with the municipality was recently when they asked for an extension from May to end of June.

Taapopi said the businessmen were welcome to ask for contract documents from the day the council approved the deal. “It’s just an excuse,” Taapopi said.

The CEO said he is not aware of any communication from Namusa about their dissatisfaction over the content of the land deal. He also warned that they might be forced to look somewhere else.

“They should tell us if they have a problem with the agreement. Otherwise we will look at other people interested in the land. We will consider others who want the land,” he said.

A city management source said that Namusa might be struggling to raise the N$143 million purchase price.

Namusa was also aised by council to enter negotiations with liquidators regarding buying the buildings on the land.

Source : The Namibian