Staff Reporter
Windhoek-Agriculture Minister John Mutorwa says he fully understands the impact of the delay in payment to Salini Impregilo for work on the Neckartal dam, but gave assurances that concerned ministries are working around the clock to fulfil that obligation.
Mutorwa said the delay in payment by government to the tune of N$396 million is strictly due to the constrained cashflow situation government currently finds itself in, perpetuated by the global economic slowdown.
As well as domestic factors, the local economy has been severely affected by low commodity prices, while the poor performance of neighbouring economies South Africa and Angola did not help matters.
The credit rating of South Africa, Namibia’s main trading partner and supplier of about 80 percent of Namibian net imports, was downgraded to junk status by rating agency Standard & Poors this year due to poor performance of the economy.
Another rating agency, Moody’s, followed suit by also downgrading Namibia’s economy to the same status – to the chagrin of authorities.
Salini this week wrote to Mutorwa and Finance Minister Calle Schlettwein to demand payment, saying further delays could lead to negative consequences, such as employee lay-offs and the halting of construction activities at the dam, whose total cost could reach N$5 billion.
Mutorwa, speaking to New Era, said he fully understood Salini’s situation, but pleaded for patience as plans are afoot to settle the huge bill.
“They are correct by demanding payment. However, it’s all down to the financial squeeze that government finds itself in. There’s definitely will – political and otherwise – to settle those invoices,” he said late Monday.
“A meeting was held on August 29 with officials from the two ministries and consultants and solutions were proposed at that meeting. We’re working on it and the matter is in the hands of the Finance Ministry, which is the custodian of government finances,” he said.