Hertta-Maria Amutenja
The ministry of defence and veteran affairs (MoDVA) is legally obliged to pay Enercon Namibia PTY Ltd monthly service bureau charges dating back to 2016, a legal opinion has found.
The opinion, dated 19 December 2024 and addressed to minister Frans Kapofi by attorney general Festus Mbandeka, states that the charges are contractually owed regardless of whether Enercon rendered services during the period.
“Service bureau charges are a fixed amount which becomes owing at the completion of each contractually stipulated time. A service bureau company, Enercon in this instance, agrees to provide services during that period, each month in this instance, and in return the MoDVA is obliged to pay the service bureau company that fixed amount whether or not any service has been rendered,” Mbandeka wrote.
He rejected MoDVA’s argument that the claim had expired, noting that the contract is still valid and does not require monthly invoicing.
“The obligation to pay arises out of the contractual provision, and no other provision requires that some service actually has to be proved to have been rendered. Even if the service bureau company tenders services which cost more than the service bureau charges as stipulated, it is only entitled to the contractually stipulated amount and not more,” he said.
Mbandeka advised the ministry to settle the claims to avoid lengthy legal proceedings, warning that arbitration would suspend but not cancel the prescription period.
“MoDVA is contractually obliged to pay these monthly service bureau charges. Furthermore, these claims will continue to increase for as long as the agreement is still valid. If the ministry still wants to continue with this agreement, our office may assist MoDVA to renegotiate these monthly charges provisions to be limited to services rendered with proof thereof that the services were performed and not how it currently reads to be payable monthly whether work has been performed or not,” he said.
Under the agreement, charges are set at N$42 250 per completed home base station per month and N$33 221.36 for each strategic petroleum reserve facility.
The charges continued to accrue monthly and will escalate unless the ministry settles or renegotiates with Enercon.
Enercon is linked to Namcor corruption accused brothers Peter and Malakia Elindi. Other partners include fugitive Victor Malima and Austin Elindi – the son of Peter.
The company entered into a 15-year contract with MoDVA on 15 September 2016 to supply petroleum products and construct fuel base stations.
The deal included provisions for strategic petroleum reserve facilities and home base stations, with charges increasing by 10% annually.
Earlier this year, Enercon received N$60.9 million as a partial settlement but is still pursuing N$484 million in damages over what it calls an unlawful termination of the contract.
MoDVA has argued that some claims were prescribed, while Enercon insists the termination was unjustified.
On Monday, the Windhoek High Court placed the company under a final liquidation order to recover a debt of N$114 million owed to Namcor Trading and Distribution (Pty) Ltd, a subsidiary of the state-owned petroleum company Namcor.
