Govt gets 30% in desalination plant while Chinese state-owned giant gets 70%Political leaders have blasted the government’s decision to hand a...
Published on by Water Network Research, Official research team of The Water Network
Political leaders have blasted the government’s decision to hand a foreign company a 70% controlling stake in a coastal desalination plant, leaving the state with a minority 30% in a N$3-billion project.
For years, Namibia’s only main desalination plant was owned by French state-owned entity Orano, formerly Areva.
The government has for years tried to buy that plant, known as the Erongo desalination plant, but at some point the government wanted to get its own water plant.
However, in recent years the state, through NamWater, opted to form a company with Swakop Uranium to run the desalination plant.
Swakop Uranium is a subsidiary of the state-owned China General Nuclear Power Group.
NamWater and China General Nuclear Power Group signed a joint-venture agreement to develop the desalination plant in the Erongo region.
It is estimated that the new plant will produce about 20 million cubic metres of water every year and will be fully connected to NamWater’s existing network to accommodate industrial, commercial and domestic water requirements across the region.
‘DEEPLY CONCERNING’
Independent Patriots for Change (IPC) member of parliament Imms Nashinge says the arrangement is deeply concerning since water is a public good that should remain under majority state control.
“It’s bad. It’s equivalent to privatising water, which the government said it would never do,” he says.
The project, which aims to remove minerals and salt from seawater to produce fresh drinkable water, was announced last December.
Nashinge says foreign-owned entities should not hold 70% of distribution of water in Namibia.
“The IPC categorically rejects the notion that a foreign-owned entity should hold majority ownership of 70% of any infrastructure that controls the production and distribution of water in our country,” he says.
“Water is a strategic national resource.
It is listed in the same category as land, minerals, and energy when we speak of national sovereignty.
Allowing a foreign commercial entity to own and effectively control the primary switch of water production in the Erongo region is not partnership at all.
“That is pure surrendering of our sovereign authority over a life-sustaining resource,” he says.
Nashinge warns that if water production is driven by commercial considerations, vulnerable communities could struggle to afford it.
“Poor people won’t be able to afford it, and that is the primary reason why we have a government – to provide basic needs,” he says.
The project will include not only the seawater desalination plant itself, but also bulk water pipelines, pumping stations and connections to NamWater’s existing distribution system, enabling water to be supplied to industrial, commercial and domestic users.
According to Nashinge, there will be no guarantee that communities’ access to this water would be protected.
He says NamWater is a capable institution with the financial standing, technical expertise and legal mandate to lead major water infrastructure projects.
“If NamWater lacked the capital to lead this project, the government should have strengthened it through sovereign bonds, development finance institution partnerships, or structured financing from the African Development Bank, the Development Bank of Namibia, or regional multilateral institutions,” he says.
Nashinge asks why local private sector players were not included in the ownership and financing structure, saying the current arrangement misses an opportunity to build domestic capacity in strategic infrastructure.
“Building local capacity in strategic infrastructure is an economic imperative.
The current structure bypasses that opportunity entirely,” he says.
NamWater has maintained that the project, which was the Cabinet’s approval, will see about 60% of its cost financed through debt.
However, Nashinge says if NamWater or the government is providing guarantees to support a project in which they hold only 30%, Namibia would bear financial risk disproportionate to its ownership stake.
Attached link
https://www.namibian.com.na/govt-gets-30-in-desalination-plant-while-chinese-state-owned-giant-gets-70Taxonomy
- IT
- Desalination
- Water Governance
- Institutional Development & Water Governance
- water packaged plants
- financing
- Namibia
1 Comment
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It is incomprehensible how the U.S. is allowing and facilitating CCP proxy ownership of farmlands, many near military or sensitive sites,, businesses and educational institutions.