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Subcontractors left hanging

2020-09-11  Eveline de Klerk

Subcontractors left hanging

Legal troubles are piling up against a South African-born businessman, with scores of contractors claiming they are owed millions for services rendered. 
Bay Construction owner Alvin Naidoo has been hogging the headlines following a New Era report this week that a Walvis Bay-based ship repair company has cancelled a N$94 million housing contract, which was meant to benefit 82 employees. 

Namdock cancelled the housing contract with Bay Construction after Naidoo, who has allegedly skipped the country, abandoned several other housing projects. 
Documents seen by New Era show that Bay Construction owes some of the subcontractors up to N$18 million for houses built under the mass urban land and servicing programme for the Walvis Bay municipality, which was launched in 

Naidoo, who was initially only allocated plots for the construction of 12 houses, signed a joint venture agreement with at least 13 small contractors for the delivery of 164 houses. 

The houses were completed, however, Naidoo failed to pay some of the subcontractors and building supply companies both in Swakopmund and Walvis Bay for services rendered. 

Documents also show Naidoo was granted a N$15 million revolving credit facility by the Development Bank of Namibia. 
Local businessman Marius Greyvenstein claimed he constructed 30 houses for Naidoo and is yet to be paid for his services. He said he had to sell his building supplies business to cover the losses incurred during the project. 
“I have received a judgement of close to N$3 million only on the building material supplied to Naidoo for Bay Construction of which most went to the construction of the houses for the Walvis Bay municipality,” he explained. 

Naidoo is yet to start with the repayments of that debt, New Era understands. 
Greyvenstein said he also approached the municipality for his outstanding N$12 million on the houses but was informed through their lawyers that they do not have any agreement with him. 
“This payment was processed in favour of the DBN as per a cession agreement entered into itself (between Bay Construction and DBN),” the letter sent via lawyers to Greyvenstein from the municipality, reads. 

Greyvenstein added he does not understand how Naidoo was allowed to be paid out by a financial institution while his debts were not settled. 
“I just wanted to find out whether he was paid and what we, who were not paid, could do to recover our losses,” he said. 
According to him, the municipality failed to protect them despite acknowledging the joint venture contract signed between Naidoo and the contractors. The contract stipulated that the municipality would pay Naidoo directly for the construction of the 164 houses. 
“They could protect Naidoo from the small contractors but never did they protect the small contractors and suppliers.  I went to the CEO Muronga Haingura several times for assistance but with no luck,” he said. 

When contacted yesterday, housing and properties manager at the Walvis Bay municipality Jack Manale claimed Naidoo was  allocated 12 erven and only paid N$2.6 million for the 12 houses. 
“All the houses have been completed and handed over to the municipality . The value of the houses were about N$2.6 million and he was paid for the completed houses.”

Asked about the 164 houses and the amount paid to Naidoo, Manale initially said those houses were built by 13 different contractors. 
“The contractors had ceded their rights to Bay Construction. Council, as I said, was not party to those negotiations and agreements.  Subcontracting under any project is a contract between the main contractor and subcontractor . Council is not party to such agreements . They will have their own terms and conditions under which they are subcontracting to each other. They are  normally assisted either by the labour office or by the association of contractors,” he said.
Manale only acknowledged that they paid Naidoo directly for the 164 houses after a document he sent on 24 October 2017 specifically referencing the direct payments to Naidoo was forwarded to him.

“That is the joint venture or subcontracting companies with them... I am in Windhoek and can’t just give you a figure,” he added. 
Also contacted regarding the credit granted to Naidoo, spokesperson for DBN, Di-Anna Grobler, said that  due to confidentiality, the bank does not avail information on terms of loans or legal proceedings, although these may be released by the borrower or contained in court records. 
“The bank recognises the development and economic impact of the original intent of the loan and so, tries to preserve that, as well as the financial well-being of the enterprise. However, if remedies offered at the discretion of DBN fail, the bank has the obligation to reclaim the amount through collateral in order to lend onwards to other projects. If there are allegations of fraud, these should be reported to the bank’s anonymous, outsourced whistle-blower platform, which will conduct independent investigations,” she said. Approached for comment yesterday, Naidoo’s phone went unanswered. However, early in the week he denied abandoning the several housing projects at the coast. 
“Absolutely no truth in that but I do not want to get into a debate, so let us leave it at that,” he said. 

Left in the dark… One of the houses Marius Greyvenstein built for the Walvis Bay municipality through Bay Construction. 
Photo: Contributed

2020-09-11  Eveline de Klerk

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