Ester Mbathera
The Ministry of Fisheries and Marine Resources (MFMR) has requested authorisation from the Procurement Policy Unit in the Ministry of Finance and Public Enterprises (MFPE) to increase the contract price for its new head office project from N$3.7 million to N$11.4 million.
The project, currently 95% complete, faced increased costs due to unanticipated additional works, including the alteration and renovation of the 4th floor, installation of furniture, and completion of electrical and mechanical systems.
Work stalled on the project because the previous contractor, Zhong Mei Engineering Group JV Joevanni (Pty) LTD, abandoned the site.
This led to MFRM appointing August Twenty-Six Construction (Pty) LTD (August 26) to complete the remaining work in November 2022.
The MFRM spokesperson, Uaripi Katjiukua, explained that the ministry is not building a new head office but is extending the existing office to accommodate the staff complement.
“Currently, we have a few colleagues sharing office space with up to three people in one office. And the current building also only has one boardroom and lacks storerooms, etc. That’s what necessitated the ministry to extend the building,” she said.
She said that three variation orders were the cause of the contract price increase.
“Variation order one was caused by the conclusion of the work for the subcontractor, Cross Tech Construction Specialities, responsible for waterproofing the basements. These works were included in the previous contract, but as the main contractor at the time abandoned the project, the price escalations were not finalised,” she said.
When August Twenty-Six Construction (Pty) LTD took over, the price increase resulted from three variation orders related to escalated costs for waterproofing, renovation of the 4th floor, and additional preliminary works.
Katjiukua explained that the second variation order was caused by alterations requested in 2018 for the 4th floor, which were not included in the original contract.
“The majority of the works included electrical and mechanical works, increasing the contract sum by an additional N$5 million from N$6.1 million, making the total contract amount IN$11.1 million. Variation order three was a result of an increase in the scope of work, including additional time and various additional works, resulting in an increase of N$382,470 from N$11.1 million, making the total contract amount N$11.4 million,” she said.
In a letter to the executive director of (MFPE) Titus Ndove dated 5 September seen by the Windhoek Observer, the executive director of (MFRM) Annely Haiphene Annely Haiphene asked for an exemption from restarting the procurement process in order to avoid delays.
This exemption is to allow August 26 to complete the project and to ensure that the work is completed within the current financial year.
This is because there was a pre-practical completion scheduled for 9 September.
“Therefore the ministry is requesting to be exempted from starting the procurement process in terms of Section 62(3) as the reason for using the same contractor in terms of Section 36(2)(c), as it was required that the specific works be completed within the current financial year and the works couldn’t be completed by another contractor,” she said.
The financial implications amount to N$7.7 million in arrears, but funds are reportedly available, and the submission does not result from any audit queries.
Haiphene recommends the contract increase be approved under sections 62(3) and 36(2)(c) of the Public Procurement Act.
The MFPE executive director Titus Ndove did not respond to questions sent to him or return phone calls.
The Windhoek Observer wanted to confirm if the MFPE had approved the request.
