N$7 Billion Nampower Project Worries Government

THE Namibia Power Corporation will have to scrap its controversial multi-billion power project after the Ministry of Mines and Energy and the Electricity Control Board raised red flags.

Although it is not clear where the project was supposed to be or when it was supposed to start, President Hage Geingob and attorney general Sacky Shanghala have expressed concerns about the project allegedly saying that it is not in the country’s interest.

The Namibian has learnt that the past week was hard for NamPower, after they failed to justify the project to government. Two meetings, one held at State House and another at the Electricity Control Board (ECB) offices, all ended in NamPower failing to garner support for the project.

The 250MW project was supposed to be a stop-gap solution to the country’s power needs while the Kudu gas project is being implemented.

The 250MW project was first estimated to cost N$3 billion but sources said the cost has now escalated to N$7,6 billion.

The fact that the NamPower management and a section of its board of directors had little regard for instructions from mines minister Obeth Kandjoze, did not make things easier for the utility.

It was because of this alleged insubordination that Kandjoze sought President Geingob’s assistance to address the situation at the utility. Government sources said that Geingob called a meeting last Friday to discuss NamPower issues.

The NamPower board, Kandjoze, Prime Minister Saara Kuugongelwa-Amadhila, finance minister Calle Schlettwein, planning minister Tom Alweendo and trade minister Immanuel Ngatjizeko attended the meeting. Permanent secretaries of the said ministries as well as the ECB also attended the meeting.

Sources said Geingob felt NamPower misled Cabinet, about the change of reference in the project. He allegedly took on NamPower chairperson Maria Nakale and CEO Paulinus Shilamba specifically for having changed the project specifications without going back to inform Cabinet. Shilamba could not be reached for comment yesterday.

Schlettwein and Alweendo allegedly also aised Geingob, at the meeting, to halt the project. Geingob then adjourned the meeting to Monday 18 May, to give NamPower a chance to come back with a unified position agreeable to the minister, the board and management, because as things stand, only two board members and management support the project going ahead.

Alweendo yesterday confirmed the State House meeting saying that they were seeking clarity on whether this particular project will not end up being as big as Kudu Gas, which is government’s preferred long term solution.

A day before the State House meeting, sources said Kandjoze wrote to the NamPower board informing them that he has now reported his frustrations with them, to the President. In the letter he allegedly complained about being ignored by the board despite requesting information.

He allegedly requested the board to clarify the KPMG tender, which was published in the media as having escalated from N$2,5 million to over N$30 million. He allegedly also wanted to address issues pertaining to the board being divided and allegations that the management was undermining the board.

In the letter Kandjoze allegedly also wanted an explanation to what he termed the improper suspension of the company secretary by Shilamba and Nakale without the blessing of the board. Company secretary Susan Mavulu was suspended last month and was not told why she was being suspended.

Sources at NamPower said Shilamba allegedly suspected her of leaking information to the media.

The State House meeting was followed by a technical meeting hosted by the ECB offices on Tuesday and attended by Kandjoze and attorney general Shanghala and top NamPower management including teams working on both the Kudu and the 250MW projects.

It allegedly came out at the meeting that the 250 MW project, whose cost has now escalated to N$7,6 billion, is not viable and that there are cheaper alternatives to provide a temporary solution. (In November 2014 Cabinet was told the project would cost N$3 billion).

At N$7,6 billion, the project would cost as much as the Kudu project which is government’s preferred long term power solution.

Shanghala confirmed that the meeting took place but refused to comment or provide further details.

At this meeting Kandjoze allegedly also lashed out at NamPower management for sidestepping him and going to brief his seniors while the parastatal has ignored his invitation to brief him since his appointment as minister in March.

Kandjoze could not be reached for comment, yesterday.

ECB chief executive officer Foibe Namene referred questions to the Ministry of Mines and Energy: “I am not going to confirm things that I am not authorised to confirm,” she said adding that the ECB falls under the mines ministry hence only the ministry should respond to questions.

NamPower chairperson Nakale yesterday said: “I suggest that you confirm the continuity of the project with ECB and the Office of the President since I cannot speak on their behalf.”

She added that the estimated tariffs for electricity from this project declined by 10,8%, although the project structure was changed to align the commercial operation date of all project infrastructure. This, she said, will make it easier to fund the project once all assets are under one company and to provide consolidated credit support from the shareholders to the suppliers and control the value chain from port to plant.

“I further suggest that you confirm the minister’s views and opinions on the board with himself since I cannot speak for him either,” she said when asked about allegations that the board was undermining Kandjoze.

Source : The Namibian