• July 12th, 2020

Coronavirus delays completion of N$5.5 billion storage facility

Maihapa Ndjavera

Construction of the N$5.5 billion national oil storage facility at Walvis Bay, which was anticipated to be completed last month, is now at a standstill because of the global outbreak of coronavirus as the main contractors are Chinese who could not return to Namibia for final testing of the facility. 
This was confirmed by the Minister of Mines and Energy Tom Alweendo.

“We are busy determining the new completion date given what is going on around the world just making it more difficult to be more certain as to when the project will be finalised, so there is a need to source new specialised skills to complete the project with testing, as waiting will create uncertainty, ” said Alweendo. Alweendo noted that the project, which is funded through the National Energy Fund (NEF), is nearing completion and is projected to cost a total of N$5.5 billion, which has escalated from an initial estimate of N$3.7 billion a few years ago. 

Once completed the facility will increase the country’s security of fuel supply from the current seven or ten days to between 30 and 45 days.

Alweendo said the escalation in cost was because contractors cannot build the tanks and pump lines and continue using the existing jetty, which is too old and too small to accommodate large vessels. 
Given the fact that most of the materials to be used will come from outside the country, it was agreed that 80% of the construction tender would be awarded in US Dollars and 20% in Namibia Dollars. 
When the contract was awarded several issues arose such as a dispute as to whether the contract was supposed to be awarded in foreign or local currency. This led to the Anti-Corruption Commission being involved and its investigations are still outstanding as to whether changes were made to the ratio to benefit some individuals.

“Some of the issues during the construction include an additional need for pipelines for some of the products and also a need for some additional land. These issues contributed to an increase in costs and added to the delay of the project as there were many dates of completion before arriving here,” Alweendo said. 
– mndjavera@nepc.com.na

Staff Reporter
2020-03-13 10:42:20 | 3 months ago

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