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Namibia:Privatise Walvis Port Terminal - World Bank

22 May 2018

Source allafrica.com

By Shinovene Immanuel

Finance minister Calle Schlettwein says the World Bank has advised the government to allow a private company to run the N$4,2 billion container terminal that is under construction at the Walvis Bay port.

Schlettwein confirmed the World Bank advice to The Namibian last week when he was asked about the proposal the government had received on how to use the container terminal after its completion next year.

The finance ministry had asked the World Bank for advice last year on how the government could enter into public-private partnerships (PPPs) to manage the Hosea Kutako International Airport and the container terminal at Walvis Bay.

A public-private partnership is an agreement between a government entity or department and a private investor who, in this case, would manage the port at their own cost for several years on behalf of the state, while recovering their investments through service charges.

"They [World Bank] said the public-private partnership is possible for the port project," the minister stated.

Like the international airport upgrades, Schlettwein said the government would prefer to partner private companies to manage the port, instead of pumping state funds into managing the costly project.

Although the exact details of the advice for private partners are not known, Schlettwein said officials from other state agencies, such as Namport, were part of consultations.

"It is up to them [Namport] to decide whether they want to go for a public-private partnership or not," the minister added.

Namport, the state agency tasked with running all the seaports, manages the Walvis Bay port.

The part the government wants to give to a private company is that being constructed by China Harbour Engineering Company, using N$4,2 billion of taxpayers' money.

Namport chief executive officer Bisey Uirab told The Namibian last week that they received the World Bank report earlier this year.

"We received the report around January 2018, and commissioned a further study. We expect to receive that study report by the end of this month, after which we will engage the relevant authorities and parties to consider the way forward," he said.

Uirab noted that the construction of the terminal was at an advanced stage, and progressing well within its N$4,2 billion budget. He added that the company aims to start using the facilities by early next year.

A letter by finance permanent secretary Ericah Shafudah to World Bank country director for seven African countries, Paul Noumba Um, shows what the government wanted.

According to the letter seen by The Namibian, the Walvis Bay port, as the most significant commercial seaport in Namibia, receives around 3 000 vessels, and handles about six million tonnes of cargo every year. It is also the gateway to 190 million southern Africans.

"We believe that appointing a private sector operator may be a plausible route to maximise the utilisation of the new container terminal," Shafudah said, adding that the new terminal would be one of the flagship public-private partnerships in Namibia, and could boost the economy.

Supporters of such partnerships say the arrangement allows the government to spend scarce resources on basic needs, while the private operator would fund projects such as port expansions.

However, critics see the World Bank's advice as a way to promote the interests of private companies to make as much money as possible, and could result in strategic entry points into the country falling into private hands.

News about the World Bank's advice comes a month after The Namibian reported that the bank had advised the government to opt for a public-private partnership for the upgrades at the Hosea Kutako International Airport (HKIA) outside Windhoek.

Some have applauded the plan, while others have raised red flags.

The National Union of Namibian Workers (NUNW) last year rejected the plan by the government to place the HKIA into private hands.

"We demand that our government, with immediate effect, withdraws such ill-considered advice and the sinful public-private partnership legislation, failure of which it shall risk facing unspecified consequences from Namibian workers," the union said.

ELEPHANT IN THE ROOM

The airport and seaport are not the only projects that could be managed by private companies.

Another project which could be privatised is the N$5,6 billion fuel storage facility at Walvis Bay, which is set to be completed this year.

To put it into perspective: the government could end up spending N$10 billion on infrastructure at Walvis Bay (N$4,2 billion for the harbour and N$5,6 billion on the oil storage facility) over four years, only to hand those facilities over to private companies to manage.

Ironically, the government has not spent over N$3 billion in the past five years to solve the housing crisis the country faces.

There is currently a conflict among senior government officials and ministers about how the fuel storage facility should be used.

Some ministers want a private company to manage the facility, while others want the state to run the strategic facility.

People familiar with this matter said energy minister Tom Alweendo wants the storage facility to be managed by the state-owned National Petroleum Corporation of Namibia (Namcor).

Schlettwein told The Namibian that the Cabinet committee on treasury was still discussing how the facility should be managed.

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