BEE construction firm sues NHE for N$32 million

By Confidente Reporter

POWER-OYENO Construction, the company that was paid N$102 million in an out-of-court settlement over the cancellation of the Mass Housing Project in 2015, is now suing the National Housing Enterprise (NHE) and the Ministry of Urban and Rural Development (MURD) for a further N$32 million in outstanding interest.

Power Oyeno says the interest stems from 19 late payments made between 2016 and 2018 linked to the construction of houses in Swakopmund, and includes amounts ranging from N$283 to over N$11 million.

The construction company listed NHE as first defendant and MURD as second defendant. The amounts in interest payments it says are outstanding include N$11.1 million, N$8.7 million, N$5.8 million, N$197,654 and N$118,834, amongst others.

In its claim, the construction company argues that it is entitled to interest on all late payments.

"During the completion of the new contract, and in terms of clause 10 thereof, MURD had to pay the plaintiff within 30 days after the issuing of payment certificates. In terms of clause 10.3 of the new contract the plaintiff is entitled to interest on any late payment, being compound interest at the prevail- ing prime overdraft rate of the plaintiff ’s bank, plus 2% per annum, compound- ed monthly and calculated daily."

They said Power Oyeno banked at Bank Windhoek and at all relevant times its prime rates were 10,25% from 22 June 2015 to 21 February 2016; 10,50% from 22 February 2016 to 17 April 2016; 10,75% from 18 April 2016 to 17 August 2017 and 10,50% from 18 August 2017 to date of issue of the summons.

In its defense, the government rejected two claims on the basis that they emanate from the alleged “original contract” to which the ministry was not a party and said there is thus no basis alleged to hold it liable. “Also, the claims were settled by virtue of the settlement agreements.”

It further said another of Power Oyeno’s claims could be dismissed “because it relies on an interim payment certificate issued in terms of the new contract by the principal agent (NHE), while plaintiff claims money the principal agent set off when it determined the amount payable under the interim payment certificate. This claim is not sustainable under the new contract and in any event is certified by the principal agent (NHE) to have been part of the settlements.

“Claim 4 is for provisional claims for which there is no provision in the new contract in the absence of an interim payment certificate and is in any event premature, because there is no allegation that a final certificate of valuation was issued or a determination of the dispute was made by the principal agent, as required by ... the new contract.”

This is also not a dispute with the ministry but with the NHE, the government attorneys argued.

“Claim 5 is for outstanding interest on late payments on interim payment certificates. This is equally inconsistent with the new contract because the claim had to be dealt with in subsequent payment certificates. It is in any event premature for the same reasons as claim 4.”

Government asked for the case to be dismissed with cost. The case is now set down to be heard on 4 December.