Hertta-Maria Amutenja
The auditor general, Junias Kandjeke, has reported that the Tsandi Village Council breached the Public Procurement Act when it paid a consulting engineer more than N$1.49 million for services on a project initially awarded at N$326 176.
In the report of the auditor general on the accounts of Tsandi Village Council for the financial years ended 30 June 2021 and 30 June 2022, the payments were found to have exceeded the 15% adjustment limit set by the Public Procurement Amendment Act of 2022.
“On 09 July 2019, Tsandi Village Council awarded a contract with the cost value of N$326,176.80 (VAT inclusive) to a consulting engineer,” the report stated.
On 16 July 2019, the council issued terms of reference for municipal services design and supervision for sewer, water, and electrical reticulation at Tsandi Extension 6.
The auditor general recorded that a project kick-off meeting between the client and the consultant led to agreements on expanding the scope of works.
“The project scope was further refined to encompass both bulk and internal municipal services, comprising water, sewer, and electricity infrastructure,” the report said.
A situational analysis identified further infrastructure needs.
“Through a comprehensive situational analysis, it was detected that Extension 6, situated on the outskirts of existing developed areas, necessitated the establishment of a sewer pump station,” the report stated.
The council and the contractor agreed to divide the project into two phases. Phase 1 covered water and sewer services together with electricity infrastructure.
Phase 2 included construction of the sewer pump station and rising main services.
Kandjeke recorded that the project was implemented through three separate contracts covering water and sewer works, electrical works, and the pump station with rising main.
“At the end of the contract, the consulting engineer was paid a total of N$1,491,404.08 (including VAT) for various invoices, which is more than 15% of the initial awarded amount,” the report stated.
The Public Procurement Amendment Act of 2022 limits such adjustments. Section 62(3) states that the adjustment of the contract price may not exceed 15%, except for reasons specified in section 36(2)(b) or (c) of the Act.
This indicates that direct procurement is allowed within the specified limits when additional works, not included in the initial contract, become necessary due to unforeseeable circumstances, and separating these additional works from the initial contracts would be technically or economically challenging.
This was recorded in the report under the section “incurred expenditure contrary to the Public Procurement Act”.
