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Home / Neckartal dam cost could exceed N$5.7 billion
Neckartal dam cost could exceed N$5.7 billion
2018-01-19Staff Report 2 Matheus Hamutenya Keetmanshoop-The cost of the Neckartal dam could rise above the estimated N$5.7 billion, says Percy Misika, the permanent secretary in the Ministry of Agriculture, Water and Forestry. Speaking during his visit to the dam site on Tuesday as part of his familiarization tour of the //Kharas Region, Misika said there is a possibility that the cost of the dam could escalate above the N$5.7 billion that was indicated last year. The cost of the dam was initially budgeted at N$3.2 billion, but Misika was quick to note the cost could also decrease, which will mean the government would pay less than the stipulated estimate. He said N$5.7 billion was the figure arrived at by experts, looking at the work that still needed to be done, but the actual cost could increase or decrease depending on certain factors, such as cost of material and delays in the construction. “The amount to be paid depends on the actual work that is done and the invoices issued, so it could be less and it could be more,” said Misika. He could not give an exact figure of what the actual cost would be if the amount does increase beyond the N$5.7 billion, adding it is difficult to say as this will depend on various factors. He further said the N$5.7 billion was an estimate to July this year, but now that the dam is unlikely to be completed by July, with October the most likely month for completion according to the engineers, the cost could rise, while other factors such as delays in payment from the government could also mean an increase in the total cost. He was however pleased to announce the invoices paid so far have been less than initially projected, adding: “If things go like that the government could pay below N$5.7 billion.” “There can be cost escalation, while a delay in payments from government also means we pay more, and remember the government pays N$1.5 million in penalties daily for any delays.” He is hopeful the project will go smoothly and payments will be done on time to avoid any penalties and further delays to the project, while he announced that all outstanding Salini invoices have been settled by the government thus far. Permanent secretary in the Ministry of Finance, Ericah Shafudah, who accompanied Misika to the dam site reiterated government’s commitments to honour its financial obligations towards all national projects, which includes the Neckartal dam. She said before any government project is started there are financial considerations done and that for any project to be approved there should be funds available – and thus there is no way the government will fail to meet its obligation towards the project. “For all commitments we have made, we have to find means and ways to meet this obligation and as we speak, we have honoured our obligation, and we are paying as agreed by the government and the contractor,” she noted. 2018-01-19Staff Report 2
