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Home / Rundu sued for N$337 million over botched PPP deal
Rundu sued for N$337 million over botched PPP deal
2018-01-30Staff Report 2 John Muyamba Rundu-Lawyers representing Rundu-based property developer Armstrong Properties and Construction have asked the Rundu Town Council to pay the company N$337 million by Friday this week for allegedly cancelling a private public partnership (PPP) agreement signed between the two parties. Armstrong Properties wants compensation for servicing 600 plots on which they intended to develop 600 housing units through a PPP agreement signed with council. The council’s contribution to the project was to avail virgin land, while Armstrong Properties, on its part, was to service the land and construct houses. The housing backlog at Rundu currently stands at 30,000. Houses under this project were to cost between N$500,000 and N$900,000. On November 23, Armstrong was informed in a letter from council lawyers that the contract they signed was nullified and that the council was no longer going to continue with the PPP. Council lawyers told Armstrong Properties to rather buy the land at N$25 per square metre or give it back to the town council. The contractor, who contends that council in recent years sold huge tracts of land to a Chinese firm for N$5 per square metre, turned down the price and has decided to give back the land on condition the town council pays the cost spent on servicing the 600 plots. The company confirmed its position on the matter when contacted for comment by New Era. “Yes we are going to give the land back to them. We did our calculations on how much we have put into the project and since the contract is being stopped, all the estimated profit that we were supposed to make and the damage that we have suffered have to be paid for,” its representative, Ferdinand Olavi, said yesterday. “Our lawyer has written to them that they have to pay us N$337 million before the 2nd of February.” “We had gotten more than 100 bank approvals for our clients and more than 40 of them have cancelled due to these disputes we had, and a lot of people want to bring in applications but we have stopped taking applications,” Olavi added. News of the project being called off has disappointed many youths who had hoped to get a roof over their heads, but the project which was aimed to reduce the housing backlog in Rundu did not deliver as there were complications from the start. New Era understands that the decision to cancel the PPP agreement came after several councillors started having differences on the project. Some were of the opinion that the project invaded mahangu fields of some residents. Rundu mayor Verna Sinimbo referred New Era to the town’s acting CEO Fransiska Thikerete, who in turn said she can only comment after a council meeting scheduled for today. Armstrong was scheduled to develop a new suburb on an 82-hectare plot in an area south of the Rundu-Nkurenkuru road in Rundu. According to the design previously seen by New Era the new suburb was to have a fuel station, private doctors’ consulting rooms and a supermarket, to name a few facilities which were lined up. The project would have been the first suburb to be developed by local investors in the town. Rundu has since independence, seen development of suburbs such as Millennium Park, Queens Park and recently Rainbow Village, the old NHE township – also known as Kings Park – and the new NHE mass housing township development next to Unam Rundu Campus. The town of Rundu with its housing backlog currently at around 30,000 units, has a huge demand for houses; yet several projects have failed to take off; and thus residents had placed their hopes on this project which had shown some progress. 2018-01-30Staff Report 2
