Bad partnership to cost City millions
Investigation on the cards
During the City of Windhoek’s most recent council meeting last Thursday evening, councillors halted an ongoing Public Private Partnership between the CoW and Champac Investments for the development and servicing of erven in Kleine Kuppe Extention 1, after irregularities in the agreement came to light.Councillor Job Amupanda, leader of the Affirmative Repositioning party, said during the meeting that according to the initial documents, the CoW guaranteed the project even if anything went wrong. “A letter was written to the City from Ariya Bridge, with the final due date to pay the outstanding N$10 million today (31 August), after Champac defaulted,” he said.
Amupanda said that the PPP was funded by Ariya Bridge, a private equity fund manager that provides private equity, who received money from the Government Institutions Pension Fund (GIPF). These funds were used for the development project in Kleine Kuppe. “An amount of N$14 million was advanced to the PPP,” he said.
Furthermore, it was found that relocation and electrical repair were done by the City on behalf of the developer for which the City provided an invoice. “While the City’s engineers did the work, it seems from the project team, they paid another company that doesn’t exist, an amount of N$392 000 for the same work that the City already did,” he said.
Amupanda showed the chairperson documents indicating that both invoice numbers are the same.
According to Amupanda, on the revenue account, the PPP partners have been paying themselves loans. “That is where the profit share is supposed to be coming from,” he said. According to council documents, the Council agreed to the proposed 50:50 profit sharing.
Amupanda further stated that Ariya Bridge lawyers wrote a letter to the bank. “When the revenue account was opened, the agreement was attached. Further, it is not possible for only one party to be able to withdraw funds, without the knowledge of the financiers or the City.”
The item, which was due for the approval of the second phase of the project, was sent back to the management committee for a thorough investigation. The development agreement for Phase 1 was signed on 15 May 2017.