Keetmans defends Red Force tender

The Keetmanshoop Municipality says there is nothing untoward about its tender award for municipal debt collection to Red Force Debt Management, which residents say an ‘outsider’ got the job while locals sit at home.

The tender closed on 30 December last year when, as the Tender Bulletin stated, the whole country is in shut-down mode.

Red Force is owned by Namibian George Itembu, the executive internal auditor of the Road Fund Administrator (RFA).

This company has also been enlisted by Agribank to collect debt of N$500 million.

Questions are also asked about Red Force’s CEO, the 27-year-old Zimbabwean, Julius Nyamazana, who in January 2014 appeared in a Bulawayo court on charges of defrauding Edgars Zimbabwe of more than US$30 000 or N$450 000.

The two-year tender was awarded to Red Force in April and the company was to commence with collecting more than N$60 million from May.

According to the contract between the two parties, the municipality will pay Red Force 3% commission on all debt recovered and the client will pay 8%, which means that Red Force will receive 11% on all monies collected.

This translates into N$6.6 million on the outstanding N$60 million.

The municipality said the rest of the recovered money will be used for road maintenance, servicing land and upgrading the bulk infrastructure to cope with a growing population.

Residents preferring anonymity questioned why the municipality had not used its own debt control division to collect the debt or alternatively use the town’s unemployed youth to assist the council in this venture.

Dawn Kruger, the municipality’s spokesperson, said the council is obliged to go out on tender for any project in excess of N$100 000.

She said only tenders from outside the town were received from which the best tenderer was chosen.

Moreover, Kruger said the municipality does not have a debt collecting department and has always conducted debt collecting on an ad hoc basis.

“This practice did not yield the necessary results, hence the decision taken to put the project on tender. The objective was to find a professional company with the necessary skill and resources to recover the outstanding debt,” Kruger said.

She said unemployed youth with required qualifications can still apply for positions at Red Force’s office set up in the town.

Cutting off supply?

Residents have expressed concern over possible terminations of municipal services if they are unable to pay outstanding debts.

At the announcement of the tender award in April Nyamazana had mentioned “drastic action” like cutting the supply of services and/or legal action “if needed” should residents and other entities fail to pay their debts.

Again the municipality downplayed this threat, saying Red Force would first do a thorough analysis and make recommendations to the council on the way forward, vowing to pursue all other avenues before drastic steps are to be taken.

Artificial debt

Residents claimed that some of the outstanding debt is “artificial” because the finance department did not write off debt of people who have died while interest is mounting.

Kruger said debt on any property is part of an estate and should be paid by the heirs and beneficiaries of the estate.

“In most cases, however, the amounts have escalated only after the deceased have passed. The N$60 million is thus owed on active accounts and interest is charged as per normal business practice,” Kruger said.

Vandalism

The municipality said pre-paid water meters and toilets in the informal settlement are vandalised as soon as they have been repaired.

Kruger said the municipality is now working on a long-term strategic plan to do away with informal settlements or to move people permanently from un-serviced.

She said the council has recently serviced Extension 4 in Tseiblaagte where residents are now leasing erven and are encouraged to apply for consumer accounts.

Casual workers are used for unskilled labour “to assist the unemployment problem” and to give these workers an opportunity to improve their skillset, said Kruger.

Bigger projects are given to qualified local contractors “as far as possible”.

CATHERINE SASMAN