Edgar Brandt

Finance minister Iipumbu Shiimi has conceded the authorities were not fully prepared when a decision was made to auction the 
governmental objective fishing quota to the highest bidder. 
Shiimi yesterday announced treasury has raked in a mere N$8.4 million from successful bids and N$76 000 in quota application fees. This is a far cry from the anticipated N$600 million that treasury announced it would net in the process.
“I should also point out that we, as a government, did not have enough time to ensure that all necessary measures were put in place before the auction took place. This was mainly due to the fishing season for some species, such as hake, which is ending today (yesterday) and we wished to have the quota exploited before the end of the season. 

It was, therefore, difficult to provide a longer payment period for bidders,” Shiimi told journalists.
“We have learned good lessons from this auction and that will be valuable going forward. In the future, punitive measures will be introduced, including requirements for payment guarantees or bid securities before participation in the auction. 

This will ensure that bidders meet their financial commitments and mitigate the risk of speculative bids. 

In addition, more time will be given to bidders to arrange their finances. Further, bidders will be required to prove that they have access to fishing vessels.”
Requests for payment period extensions, insufficient financial capacity and lack of access to adequate fishing vessels were some of the factors blamed for the dismissal outcome.  
The fish species auctioned were 11 000 metric tons (MT) of hake, 72 000 MT of horse mackerel and 392 MT of monk. 
However, the quantities offered by successful bidders were significantly less at 100 MT for hake, 1 517 MT for horse mackerel and a minuscule 92 MT for monk. This means there are still unallocated quotas totalling 10 900 MT of hake, 70 483 MT of horse mackerel and 300 MT of monk. 
Shiimi added bidders who fulfilled their payment obligations have started harvesting their respective quotas allocated to them. 
The finance minister was still hopeful one or more of the sectoral players may settle their payment obligations in due course. 
The main reason for auctioning the governmental objectives quota, which is different from commercial quotas, was to find better ways for the country to fully benefit from her natural resources and promote transparency. 
Said Shiimi: “Although the first auction did not yield the desired outcome, we gained significant insight from the process. This knowledge will be used to ensure that future auctions will reach the set objectives”.  
The auction process was managed by a technical committee, which comprises senior officials from the fisheries, finance, works, National Planning Commission, Central Procurement Board of Namibia and the Office of the Attorney General. 
Shiimi yesterday said the technical committee has been directed to plan future governmental objective fish quota auctions for the next season for hake and horse mackerel, starting November 2020 and January 2021, respectively, taking into account lessons learnt from this auction.  
The auction process was implemented between 17 August 2020 and 9 September 2020. The successful bidders from the first round of the auction were awarded bids valued at a collective amount of N$627.9million and were expected to settle their allocations by 2 September 2020. 
   
Shiimi explained that most successful bidders requested for a payment deadline extension or an extension of the harvesting season. 

“Even though the deadline could be extended for payment, bidders were informed that extending the harvesting period was not legally possible. Unfortunately, many did not keep their payment commitments,” said Shiimi.  

This resulted in a second-round of bid evaluations, where a total number of 18 highest bidders were awarded bids valued at N$464.9 million. 

Shiimi stated that award letters were sent to bidders who were given up to 15 September 2020 to make payments for their respective allotments.

 However, out of these, only three bidders accepted and settled their payments, while others requested extensions. 

Also, Shiimi stated that the allocated timelines for payment and for harvesting the quota were too short to enable international companies to participate in the auction, citing that international entities only resulted in 23% participation, while local participation accounted for 77%. 
  
Said Shiimi: “I should also point out that we, as a government, did not have enough time to ensure that all necessary measures were put in place before the auction took place. This was mainly due to the fishing season for some species, such as hake, which is ending today and we wished to have the quota exploited before the end of the season. It was, therefore, difficult to provide a longer payment period for bidders.”

Also, at yesterday’s briefing, fisheries minister Albert Kawana said every cent generated from the auction must be accounted for. He added that the funds generated will go to the State Revenue Fund from where it will be included for priority areas in the national budget.

- ebrandt@nepc.com.na