RCC defends N$900 million tender

Windhoek-The Roads Contractors Company (RCC) has clarified the awarding of tenders reportedly valued at N$900 million to relatively young companies, namely Sumbawa Island Investment and Kwane Fleet Services. According to RCC's chief executive officer, Immanuel !Hanabeb, the products offered by the two companies are distinctly different.

Keane Fleet Services offered mainly original Caterpillar products and Sumbawa Island Investment offered a mixed variety of brands ranging from original a Sino Truck, UD Truck, Broce Broom, Written to ETNYRE and Metso, etc. The two tenders were awarded different categories and therefore the values of their bids are different and thus direct price comparison is relevant in this case. There is no relation between the position of the CEO and the award of these tenders as these two processes are distinctly different, said !Hanabeb in a statement issued on Tuesday.

RCC says it has developed four key strategic outcomes to arrest the institution's financial decline, poor corporate governance, lack of talent and low moral which has led to poor project delivery. The strategy is premised on four outcomes which are to; increase and diversify its revenue base; improve capital asset management; improve plant operations and efficiencies; and enhance human capital management to pursue transformation.

The successful implementation of the strategy, which was developed after the appointment of !Hanabeb as chief executive officer, is premised on two specific principles, namely financial injection by the shareholder and allocation of capital projects to RCC by government, Roads Authority and other government agencies.

Plant and equipment levels deployed at RCC projects are very low as opposed to the target of 80 percent. Hence the need to increase capacity through the acquisition of new plant and equipment, said !Hanabeb. A needs assessment of plant and equipment requirements was completed in March 2016 and was approved by the RCC's board of directors at the end of March of the same year.

!Hanabeb explained that construction companies ordinarily acquire plant and equipment based on revenue and duration of the projects. Plant and equipment cost at the Bitumen Standard Roads amounts to 45 percent to 55 percent of the total project value. Given the size of RCC's projects the company should have acquired a quality new plant a few years ago. Therefore, RCC plans to source funding from projects as opposed to hire plants from third parties or joint venture partners, said !Hanabeb.

He continued that RCC has launched the Plant and Equipment Renewal Project as part of its core strategic initiatives. The company plans to procure approximately 420 heavy plant and specialised equipment over the next three to five years, based on project requirements, !Hanabeb added.

In the statement, !Hanabeb also stipulated exactly what RCC's procurement process entails, clarified his role as CEO and touched on board appointments and board consideration of tenders.

Source: New Era Newspaper Namibia