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Probe fuel storage audit findings – Cabinet

Cabinet has issued a directive for investigations to be carried out into a number of issues flagged by a PwC audit on the controversial N$5.5 billion national oil storage facility at Walvis Bay, information and communication technology, Stanley Simataa has told Eagle FM.
The minister said there were inadequacies that were detected pertaining to this project. Now in order to be able to get to the core of those inadequacies, the audit firm PWC was engaged to conduct a thorough auditing of what has transpired and that auditing firm has then submitted its report and in that report certain issues have been flagged,” he said.
The issues pertain to the accuracy of the tank height and size of the land as well as possible breach of confidential information that led to the taking over of the land by the contractor.
There have been reports that the construction of the facility encroached on land owned by a Chinese company, which caused some issues.
Reports were that government entered into negotiations with the Chinese to own the land, but the price was placed at between N$15 million and N$23 million.
The land is said to have been valued at N$9 million
The mines ministry advised Namcor to buy the land, to avert the possibility of building a strategic national facility on Chinese land.
The oil facility contract was awarded in 2014 to the CRB consortium which is made up of China Harbour Construction Engineering, state-owned Roads Contractor Company (RCC) and Babyface Civils, owned by businessman Vaino Nghipondoka. The overall cost of the project was initially put at N$920 million but costs escalated to N$4 billion before ballooning further to a whooping N$5.5 billion.
“The other issues that cabinet directed the ministry of mines and energy to do based on the outcomes of this audit is to undertake an investigation as a matter of urgency depending on the technical evaluation on the process and manner in which there was a mismatch between the tank height and the land that I have referred to. They need to dig deeper into the issue and determine exactly what happened because some of those issues have generated additional cost implications that have added to the original value of the contract. So we need to get to the bottom of the issue.
Additionally, cabinet also directed the ministry of mines and energy to conduct an investigation to ascertain if there was a breach of confidential information leading to the acquisition of the land by the contractor because the manner in which that additional land was acquired has been flagged and is questionable. So that needs to be investigated,” said the minister.
Simataa added that also pertaining to the land, the ministries of finance and mines and energy were directed to seek an adequate evaluation of the land to ensure that government pays market related price for the land if that land was to be procured.

Julia Heita

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