WALVIS BAY – Henties Bay municipality acting CEO Ignasia Neis said the contract with RedForce debt management could have adverse implications on their ability to service costs and debt recovery.

In her affidavit submitted Tuesday in the High Court of Namibia, she responded to an urgent application by RedForce. 

The application was filed last week. 

It seeks to prevent the municipality from cancelling their contract.

The municipality initially signed an agreement with RedForce in 2022 to help recover millions in unpaid rates and taxes from residents.

However, following a council resolution on 6 October, the municipality decided to terminate the contract due to multiple discrepancies flagged by a consultant.

“The addendum grants RedForce an exclusive mandate with no penalties for failing to recover outstanding debts. This lack of accountability poses significant risks to our finances. Our council clearly no longer requires RedForce’s services, yet they continue as if nothing has changed,” Neis stated in her sworn statement.

Neis said their CEO Elizabeth Coetzee was suspended in October 2023 over irregularities linked to the RedForce contract. 

Additionally, the municipality’s procurement committee had previously raised concerns about the contract’s validity, seeking clarification on the addendum.

Neis noted that an urgent audit request was sent to the Procurement Policy Unit on 15 November 2023.

“Our letter emphasised the importance of transparency, as discrepancies in the contract raised questions about the procurement’s integrity. We believe it is essential to examine the negotiation and execution of this contract,” she stated.

Further detailing the irregularities, she highlighted that the contract’s notice of award, signed on 16 December 2021 by the now-suspended CEO, included terms that required a performance security and liability insurance to be submitted before the contract was signed.

The contract was to be signed within 30 days of the notice of award, with the start date set for the signing day. 

However, only the initial contract was signed, and no performance guarantee was provided.

“The bidder also amended the original contract and added an addendum that was never reviewed by internal procurement structures before being signed by the accounting officer,” she said.

Neis argued that at a special council meeting held on 6 October 2023, the council unanimously resolved that RedForce’s services were no longer required.

Yet, RedForce continues to operate, allegedly receiving payments.

“Minutes from a 2 August 2022 procurement committee meeting highlight ongoing concerns about RedForce. The committee questioned the validity of the contract, noting it was signed beyond the bid validity period, and urged further investigation,” she stated.

Under Section 63 of the Public Procurement Act, the municipality asserts its right to terminate contracts in the public interest.

“Numerous complaints from the public and concerns identified in the consultant’s report support the council’s decision to terminate the RedForce contract,” she said.

The municipality maintains that it acted within its legal rights, arguing that RedForce is entitled only to reimbursement for expenses already incurredm, profits.

Meanwhile, in an urgent application to prevent the municipality from cancelling the contract, RedForce’s legal representative Margaret Malambo argued that the municipality’s decision was abrupt and unlawful.

Her affidavit states that RedForce, which operates nationwide with a workforce of 91, was awarded the contract in 2021 to manage debt recovery services for the municipality.

The municipality’s recent move to end the contract has sparked a legal dispute, with RedForce contending that it was denied an opportunity to address the issues raised in the municipality’s internal review.

“This termination was abrupt and unjustified. The municipality has yet to provide any details of its internal review or allow RedForce a chance to respond to their findings,” she stated in her affidavit.

RedForce claims that the debt recovery service has been successful, having collected over N$43.1 million for the municipality since early 2022. 

They said they significantly reduced outstanding debts. 

Malambo argued that this track record does not reflect any failure on RedForce’s part, adding that the company was unaware of any complaints from the municipality regarding performance.

“We have met all contractual obligations. The decision to terminate the contract not only violates RedForce’s legitimate expectations but disregards the due process we are entitled to under the law,” she stated.

She said the urgent application seeks an immediate suspension of the termination decision, pending a more thorough court review. 

She argued that RedForce relied on this contract to sustain its Henties Bay operations, which were established specifically to serve the municipality’s debt-recovery needs.

“The municipality’s actions could cause significant operational and financial harm to RedForce. We need the court’s intervention to ensure that procedural fairness is upheld,” she said.