Martin Endjala
RedForce Debt Management has threatened to take legal action against the Municipality of Walvis Bay for breach of contract.
This follows the motion that was passed by the council to terminate the contract earlier this week.
RedForce’s deputy chief executive and legal advisor, Magaret Malambo told Windhoek Observer that the company finds it very comical for the council to terminate a valid contract already in place.
“We find it very alarming and comical that the council has passed a motion contrary to the signed contract terms between the parties. Before our procurement and subsequent appointment, a council resolution was passed, wherein the very same council resolved to hire a debt collection company via open national and public bidding,” she said.
Malambo stated that a tender document was advertised in the local newspapers, and like many other debt collection companies in Namibia, RedForce applied and the company was selected as the preferred debt collector on behalf of the council.
“We are still operating and shall continue to do so until a formal notice of termination is issued, after which we shall take the necessary legal action to enforce our rights in terms of the procurement contract,” cautioned Malambo.
She added that before RedForce started operating, the company and the Municipality’s executive administration held various consultations regarding the terms of its operations, and the council was presented with a presentation on the procurement contract, of which terms and conditions of the contract were duly discussed and analysed during the presentation.
Malambo stressed that it is very concerning and highly misleading for the same councillors present during the presentation and meeting to say they had no knowledge of RedForce and were never consulted by the executive administration.
Walvis Bay municipality’s acting chief executive officer, John Esterhuizen, confirmed that a notice instruction had been executed following the motion to terminate the contract with RedForce.
Last week, a local daily newspaper reported that terminating RedForce’s contract would cost the municipality an estimated N$45 million.
The two parties’ contract agreement was of five years and lasted only six months. During its tenure, it is reported that RedForce has collected N$85 million in debt owed to the municipality. The Municipality is owed about N$378 million by residents and businesses.
RedForce services have been enlisted by Windhoek, Okahandja, Walvis Bay and Rundu local authorities.
Residents in these towns have often demonstrated against Redforce describing the manner in which the debt collection company’s process as dehumanising and forceful.
Last year, public sector management scholar, Susana David proposed that councils and residents need to find common ground and identify sustainable coordinated solutions as partners.
“Local authority councils can also provide relief by finding innovative ways in which defaulting residents can pay off their debt, and the installation of prepaid water and electrical meters. Councils may also consider installing free prepaid electricity meters for the elderly, and also consider writing off debt owed by pensioners as well as waive accumulated interest rates for all residents,” she said.
She also advised that RedForce approaches its debt collection with the understanding that many households are going through some form of financial crisis and are making major adjustments to be able to afford the daily basic needs.
