Nampower Sued Over Bee

NAMPOWER is being dragged to court after it chose black economic empowerment, decentralisation and rural development as bases for awarding a N$30 million tender.

A Swakopmund-based civil construction firm, Premier Construction CC, is now suing the power utility and wants it to cancel the tender award.

NamPower awarded the tender to upgrade an electricity substation in Kunene and construct a terrace, roads and other civil works to Outapi-based Ama Engineering CC. Kunene substation is located 40km south of Ruacana.

Premier Construction CC is asking the High Court to have tender number NPWR201423 stopped. The close corporation is questioning the legality of the process to award the tender to Ama Engineering CC.

Premier Construction is requesting the court to set aside the award of the tender to Ama Engineering and Construction CC and to declare any agreement between NamPower and Ama Engineering invalid.

Premier Construction is also saying that Ama Engineering should be barred from doing any work on the tender if a contract was already signed. The close corporation also wants NamPower and the respondents to pay for its legal costs in the case.

The firm claims that NamPower did not follow internal procedures when the company awarded the tender, and that its own tender bid was 25% lower than Ama Engineering’s. Ama Engineering’s tender bid was at a price of N$29 million, while Premier Construction’s was at N$23 million. Another tenderer, Emirates Trading, which is also listed as a respondent, submitted a tender quote of N$34,6 million.

NamPower chief executive officer Paulinus Shilumba defended the award in an affidavit filed with the court, saying it is in line with NamPower’s policies and procedures. He said the tender was awarded on 8 July and signed on 6 August. Shilamba also said that Ama Engineering has already signed an acceptance letter and is already occupying the site, where it has brought equipment and has already started working.

Shilamba claims in his affidavit that Premier Construction has thus far received NamPower tenders worth more than N$66 million between 2009 and last year.

The Namibian understands that the NamPower board of directors had to step in to prevent the tender from being awarded to Premier Construction. The matter took the power utility’s board three meetings to conclude.

When the internal tender committee allegedly presented to the board its decision to award the tender to Premier Construction, it had stated that all three shortlisted companies had the same technical score. The board then assessed the three bidders’ profiles and decentralisation and rural development. It was concluded that Ama Engineering from Outapi is the closest to the site, at a distance of less than 100km. Emirates, based at Ongwediva, is second in terms of proximity compared to Premier, which is based at Swakopmund.

The board allegedly asked the internal tender committee to provide it with statistics of the number of contracts awarded to BEE companies over the last three years. Sources pointed out that the statistics shocked the board. The statistics showed that so far this year NamPower awarded contracts worth over N$880 million and only N$13 million – about 1,5% of the total – went to BEE bidders.

In 2013 the company had tenders worth N$413 million, of which only N$1,6 million – about 0,4% of the total – was allocated to BEE bidders.

In 2012 the company issued about N$453 million in tenders, with about N$97 million, which was about 21,5% of the total, having gone to BEE companies. This was largely because that year the company awarded an N$80 million coal tender to a BEE company.

With the internal tender committee’s presentation, the NamPower board was also informed that the technical evaluation had changed suddenly and that the three companies no longer had a similar technical score but that Premier Construction had scored higher than the other two. This allegedly made the board suspicious. As a result, the board decided to use its discretion to award the tender to the company which is based closest to the construction site, despite it being scored second due to its price.

The case is set to be heard in the High Court on Friday.

Source : The Namibian