Swakop, Rent-a-Drum marriage questioned 

Swakop, Rent-a-Drum marriage questioned 

WALVIS BAY – The Swakopmund municipality’s decision to renew its contract with Rent-a-Drum last year has adverse effects on competitors, the Namibia Competition Commission (NaCC) has found. 

The NaCC has now given the Swakopmund municipal council, Rent-a-Drum and Molok OY Ltd an opportunity to make written submissions or oral representations to explain themselves. 

In a statement released recently, the NaCC stated that Swakopmund contravened section 26(1), read with section 25(2)(a) of the Competition Act, which states that businesses are prohibited from abusing their dominant market position. 

This includes imposing unfair prices or conditions, restricting production or market access, treating similar transactions differently, and forcing acceptance of unrelated contract terms. 

The rules ensure fair competition, and protects consumers and other businesses.

The Swakopmund municipality last year agreed to renew their contract with Rent-a-Drum. 

At the time, it was said the decision was to ensure employment security for over 30 people, who were expected to lose their jobs when the contract ended. 

However, the contract was withdrawn in November last year, and the council opted to reopen the contract for bidding, in compliance with procurement statutes. 

Last year, Swakopmund CEO Archie Benjamin said they were required by the Public Procurement Act to advertise.

Spokesperson for the municipality, Linda Mupupa told New Era on Sunday that they would respond to detailed questions yesterday. 

However, at the time of going to press yesterday, no responses were received by this publication. 

Meanwhile, NaCC spokesperson Dina //Gowases, in a statement issued on Friday, indicated that they had concluded the investigation into the Swakopmund Municipality, Rent-a-Drum Pty (Ltd) and Molok OY Ltd contract, which allegedly restricts competition.

“The investigation revealed that the Municipality of Swakopmund exclusively uses the Molok deep waste-collection system, which is proprietary and incompatible with other systems on the market. 

The municipality specifically requests Molok bags, which can only be sourced from Rent-a-Drum. Molok OY, a Finnish company, appointed Rent-a-Drum as their sole distributor in Namibia, preventing competitors from sourcing from them,” she said. 

“Based on the above, the Commission’s findings are that the conduct of the respondents has adverse effects on competition, and thus makes a proposed decision that the Commission has afforded the respondents an opportunity to make written submissions, or indicate whether they require an opportunity to make oral representations in terms of Sections 36 and 37 of the Competition Act,” she said.

She added that while a final decision has not been made, the Commission notes the provisions of Section 40 of the Act might involve paying damages or a fine.

Meanwhile, the council in January this year said they would start a public procurement process to invite all recycling companies to recycle the town’s waste.