Minister of Urban and Rural Development Erastus Uutoni has rejected the sale of a prime piece of land in Oshakati that was initially awarded to a company belonging to northern-based business tycoon Erastus ‘Chicco’ Shapumba.
This follows the 11 May 2022 Supreme Court ruling, which directed the minister to make a decision on whether to approve the proposed sale. Uutoni has also directed the town council to restart the process of selling the land in question.
In 2016, the Oshakati Town Council agreed to a giveaway price of N$3.5 million for the plot where the open market was previously situated. Mouse Properties Ninety-Eight CC, which is solely owned by Shapumba, initially offered to buy the land for N$2.5 million, which was eventually increased to N$3.5 million.
This deal was, however, met with a string of legal objections which lasted for about six years.
Administering the court’s ruling in a signed and stamped letter dated 7 February 2023, Uutoni said the sale of Erf 1342, which is situated at Extension 4, measuring 1.7 hectares, would not be in the public interest.
“Firstly, there were four valuations submitted by independent valuers on request by the Oshakati Town Council. The highest valuation of Erf 1342 was N$45.5 million, and the lowest was N$16.1 million. My preliminary view is that these valuations were not considered by the Oshakati Town Council when it seemingly agreed to the proposed price of N$2.5 million, later changed to N$3.5 million,” read the letter that was also copied to the Oshakati Town Council’s CEO and its mayor.
The minister reasoned that the price of N$3.5 million is only about 21.7% of the lowest valuation done by Messrs Northern Properties Valuers.
“A price discount was given by the Oshakati Town Council in the proposed sale, but it is unclear how much discount was calculated and/or arrived at by the town council, given that the final price was neither the price in the valuation roll nor the prices indicated in the independent valuations,’’ he stated.
Furthermore, it is not apparent as to what factors exactly were taken into consideration by the Oshakati Town Council which influenced the discounted price given to Mouse Property Ninety-Eight CC.
Also, there is no clarity as to whether the Oshakati Town Council undertook any detailed and objective cost-benefit analysis which could guide the council to justify how the benefits of the proposed development would offset the substantial discount on the price, compared to the valuations of the property.
“I am considering not granting approval of the proposed sale of Erf 1342, Extension 4, Oshakati by the Oshakati Town Council to Mouse Properties Ninety-Eight CC. I am also considering directing the Oshakati Town Council, if it so wishes, to sell Erf 1342, Extension 4, Oshakati. It must call for a new process of the sale,” he said.
The politician asserted that the town council should do so by inviting new bids to be advertised as widely as possible in the media in order to alert possible interested parties to the intended sale of Erf 1342.
Uutoni further said in calling for the new sale process, the town council should consider a revaluation of the land, and should also inform the council of “the optimum, correct and suitable pricing” for the land in question.
The minister has, however, noted that Mouse Properties Ninety-Eight CC can make any representations from their side within the seven days given, from 7 February 2023.
Shapumba said he was not aware of the letter in question.
“I don’t know, and I have not heard of anything,” he claimed as he ended the phone call.
Uutoni refused to comment, while Oshakati mayor Leonard Hango confirmed that the council received a copy of the minister’s letter, but could not comment on it.
“I can only brief you once I go through the statement, as I am driving now,” said Hango on Sunday afternoon.
On Monday, Hango could not be reached as his phone went unanswered.
Attempts to obtain comment from Oshakati’s CEO Timoteus Namwandi proved futile, as calls to his personal mobile number went unanswered.
Elia Shikongo, managing partner of Shikongo Law Chambers, yesterday contacted New Era via email on behalf of Shapumba.
Shikongo said “a final decision remains pending as our client is afforded an opportunity to address the minister before a final decision is communicated.”
“The honourable minister himself, we trust, has now through his office’s own efforts been able to establish that none amongst the previous bidders have expressed any interest in proceeding with the project or raising any further issues, as none took up the invitation from his office nor participated in any of the court proceedings. The only bidder that has maintained an interest and capability in continuing with the process is our client, Mouse Properties.
“Finally, our client believes that not allowing the project to proceed will result in unnecessary financial exposure to the minister and/or town council, given the quantum of expenditure already incurred on the project and land in question (taking into account that the minister was already ordered by the Supreme Court to pay the legal costs of Mouse Properties, running into millions due to a previous wrong and illegal decision). It will also greatly contribute to employment-creation and social upliftment in the area at the time when such is most needed,” wrote Shikongo.
– vkaapanda@nepc.com.na