Namibia: Ramatex Empties Capital's Coffers

The Electricity Department of the Windhoek Municipality overspent its budget by N$9,2 million, with close to half of the money spent on sustaining operations at the Ramatex Textile Factory.

NamibiaWednesday evening's City Council meeting was informed by the Electricity Department that the City of Windhoek spent N$1,8 million to provide subsidised electricity to Ramatex.

Another N$2,5 million was pumped into the operations of the textile factory, but the Electricity Department did not specify what it was for.

This means that more than N$4,3 million, or around 47 per cent of the N$9,2 million that was overspent, went to Ramatex.

In terms of an agreement entered into between the Malaysian-run factory and the City of Windhoek in December 2001, it was decided that the factory would pay only N$3,52 per cubic metre for water for two years, after which the City had the prerogative to revise the tariff to a "reasonable" amount.

That agreement lapsed in May last year.

The agreement on an electricity subsidy will end in December this year.

In terms of the electricity agreement, the price of power was set at N$0,185 per kilowatt, subject to price escalations announced by the South African power utility Eskom.

The Electricity Department's over-expenditure raised concern among councillors about the lack of clarity on what the development of Ramatex is costing the city.

DTA Councillor Ilme Schneider said she was concerned about the money spent on sustaining operations at Ramatex, especially because councillors were not informed of the exact cost to the City of Windhoek.

The Council approved the over-expenditure.

Earlier reports indicated that the city would spend N$60 million from its own coffers on water, electricity and sewerage for the Ramatex plant.

Windhoek has already spent about N$30 million on the development of the Ramatex site.

The City has also leased a 43-hectare plot of land, for 99 years, at no direct cost to Ramatex.

The textile factory is also exempted from land-use taxation.

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