Another Chinese saga 
THE construction of the N$5,5 billion national oil storage facility at the coast has encroached on land owned by a Chinese company, adding another snag in the tale of this already troubled project.
In 2014, the state awarded the multibillion-dollar construction contract to the CRB consortium consisting of China Harbour Construction Engineering, state-owned Roads Contractor Company (RCC) and Babyface Civils, owned by businessman Vaino Nghipondoka.
Although the total cost of the Walvis Bay project was initially put at N$920 million a few years ago, by 2014 cost projections had escalated to N$4 billion, and then to more than N$5,5 billion last year.
The fuel storage facility sits on land owned by the National Petroleum Corporation of Namibia (Namcor) overlooking the Atlantic Ocean, and measuring approximately 25 800 square metres. The area is five kilometres from the port town of Walvis Bay – between the naval base and the bird island.
After the storage facility was redesigned, more land was required to accommodate the expanded storage area, and the state then requested China Harbour Construction Engineering, the same company that was the lead builder of the storage facility, to sell it the ajoining area.
Sources said government began negotiations with the Chinese company in 2015 to purchase the land measuring around 4 500m2 (equivalent to half an average football field), but no agreement was reached.
It is unclear how much the Chinese want for the land, but sources have mentioned figures ranging from N$15 million to N$23 million.
State sources have expressed concern that government was being pushed to pay almost three times more for the piece of land than the N$9 million it has been valued for by experts.
Cabinet, sources also said, has apparently also discussed the storage facility land dilemma. However, the sources could not say when this discussion happened.
It is understood that some Cabinet ministers refused to discuss the issue, saying they were embarrassed that part of strategic infrastructure was being built on Chinese-owned land.
Other sources claim that the issue of the land could be a ploy to induce government to pay an inflated price to benefit certain officials and their associates.
Meanwhile, Namcor, which would administer the storage facility on behalf of the state, has been advised by the mines ministry to buy the land.
The Namibian understands that Namcor board chairperson Patrick Kauta has submitted letters to minister Obeth Kandjoze for approval.
Kauta declined to comment yesterday on how much the state would pay and what the value of the land was, while Kandjoze has been ignoring questions sent to him since last year.
Namcor managing director Immanuel Mulunga confirmed to The Namibian yesterday that negotiations were ongoing with the energy ministry to buy the land.
“We are involved in negotiations with the (energy) ministry to buy the extra land,” Mulunga said, before he declined to comment further.
However, some sources said Namcor was still waiting for Kandjoze to issue official directives on whether the oil parastatal should buy the land.
According to the sources, Namcor wants to buy the land, but on condition that the National Energy Fund (NEF) comes to the party.
Namcor owes NEF more than N$100 million in loans taken when the oil parastatal was in financial trouble several years ago. Namcor wants NEF to reduce this debt by subtracting the amount that would be spent on buying the land from the Chinese.
For instance, if Namcor paid N$23 million for the land, then the oil parastatal expected NEF to reduce their debt by N$23 million. It was not clear whether NEF would agree to Namcor's proposal.
According to a video explainer of China Harbour Construction Engineering, the oil storage facility would include oil tanks, a rail loading area, road tanker loading area and administration buildings.
It would cater for the storage of all sorts of petroleum products, such as motor gas, automotive diesel oil, diesel oil, aviation fuel and heavy fuel oil.
The project has been mired in controversy from the outset. The Namibian reported in November last year that one of the reasons the price of the project has ballooned to N$5,5 billion was because the design was changed from being a storage facility for crude oil only to that able to house several petroleum products such as petrol, diesel, paraffin and others.
Some state officials questioned why the design was initially for the storage of crude oil when Namibia was a non-oil producing country without refineries.
China Harbour Construction Engineering has not only become a powerhouse in billions worth of state contracts but the company has over the years gobbled up large tracts of land across the country, such as at Okahandja and in Windhoek.
In one suspicious land purchase transaction, from 2015, a Namibian empowerment entity which “bought” a 400 000 square metre plot situated in Klein Windhoek from the City of Windhoek in 2013 for N$48 million, wanted to transfer the ownership of that land to China Harbour Construction Engineering.
Source: The Namibian
THE construction of the N$5,5 billion national oil storage facility at the coast has encroached on land owned by a Chinese company, adding another snag in the tale of this already troubled project.
In 2014, the state awarded the multibillion-dollar construction contract to the CRB consortium consisting of China Harbour Construction Engineering, state-owned Roads Contractor Company (RCC) and Babyface Civils, owned by businessman Vaino Nghipondoka.
Although the total cost of the Walvis Bay project was initially put at N$920 million a few years ago, by 2014 cost projections had escalated to N$4 billion, and then to more than N$5,5 billion last year.
The fuel storage facility sits on land owned by the National Petroleum Corporation of Namibia (Namcor) overlooking the Atlantic Ocean, and measuring approximately 25 800 square metres. The area is five kilometres from the port town of Walvis Bay – between the naval base and the bird island.
After the storage facility was redesigned, more land was required to accommodate the expanded storage area, and the state then requested China Harbour Construction Engineering, the same company that was the lead builder of the storage facility, to sell it the ajoining area.
Sources said government began negotiations with the Chinese company in 2015 to purchase the land measuring around 4 500m2 (equivalent to half an average football field), but no agreement was reached.
It is unclear how much the Chinese want for the land, but sources have mentioned figures ranging from N$15 million to N$23 million.
State sources have expressed concern that government was being pushed to pay almost three times more for the piece of land than the N$9 million it has been valued for by experts.
Cabinet, sources also said, has apparently also discussed the storage facility land dilemma. However, the sources could not say when this discussion happened.
It is understood that some Cabinet ministers refused to discuss the issue, saying they were embarrassed that part of strategic infrastructure was being built on Chinese-owned land.
Other sources claim that the issue of the land could be a ploy to induce government to pay an inflated price to benefit certain officials and their associates.
Meanwhile, Namcor, which would administer the storage facility on behalf of the state, has been advised by the mines ministry to buy the land.
The Namibian understands that Namcor board chairperson Patrick Kauta has submitted letters to minister Obeth Kandjoze for approval.
Kauta declined to comment yesterday on how much the state would pay and what the value of the land was, while Kandjoze has been ignoring questions sent to him since last year.
Namcor managing director Immanuel Mulunga confirmed to The Namibian yesterday that negotiations were ongoing with the energy ministry to buy the land.
“We are involved in negotiations with the (energy) ministry to buy the extra land,” Mulunga said, before he declined to comment further.
However, some sources said Namcor was still waiting for Kandjoze to issue official directives on whether the oil parastatal should buy the land.
According to the sources, Namcor wants to buy the land, but on condition that the National Energy Fund (NEF) comes to the party.
Namcor owes NEF more than N$100 million in loans taken when the oil parastatal was in financial trouble several years ago. Namcor wants NEF to reduce this debt by subtracting the amount that would be spent on buying the land from the Chinese.
For instance, if Namcor paid N$23 million for the land, then the oil parastatal expected NEF to reduce their debt by N$23 million. It was not clear whether NEF would agree to Namcor's proposal.
According to a video explainer of China Harbour Construction Engineering, the oil storage facility would include oil tanks, a rail loading area, road tanker loading area and administration buildings.
It would cater for the storage of all sorts of petroleum products, such as motor gas, automotive diesel oil, diesel oil, aviation fuel and heavy fuel oil.
The project has been mired in controversy from the outset. The Namibian reported in November last year that one of the reasons the price of the project has ballooned to N$5,5 billion was because the design was changed from being a storage facility for crude oil only to that able to house several petroleum products such as petrol, diesel, paraffin and others.
Some state officials questioned why the design was initially for the storage of crude oil when Namibia was a non-oil producing country without refineries.
China Harbour Construction Engineering has not only become a powerhouse in billions worth of state contracts but the company has over the years gobbled up large tracts of land across the country, such as at Okahandja and in Windhoek.
In one suspicious land purchase transaction, from 2015, a Namibian empowerment entity which “bought” a 400 000 square metre plot situated in Klein Windhoek from the City of Windhoek in 2013 for N$48 million, wanted to transfer the ownership of that land to China Harbour Construction Engineering.
Source: The Namibian
