Contractor sues works ministry for over N$40 million
A company is claiming more than N$40 million from the works and transport ministry regarding the construction of offices for a veterinary clinic and staff accommodation in Tses, in the ||Karas Region.
Proven Investments was appointed as the main contractor for the project by the ministry in July 2015. In an application before the Windhoek High Court, Proven accuses the ministry of breach of contract and alleges that the project was never completed.
Proven is demanding approximately N$5.6 million for contractual damages and nearly N$35.6 million for loss of income and unexpected expenses.
Agreement outlined
According to court filings, the contract entered into between Proven and the ministry, the ministry was obligated to compensate the company with approximately N$11.5 million.
In June 2015, Proven entered into a transfer agreement with the Development Bank of Namibia (DBN) and the ministry.
Under this agreement, payment for the construction contract was to be ceded by Proven to DBN and paid directly to the Bank of Namibia. The Bank of Namibia was supposed to make any subsequent payments to Proven and other third parties, court documents indicate.
Proven claims it started construction work in June 2016.
Non-payment impact
They claim that since January 2020, the ministry has failed to make payments to the DBN. They say the ministry also did not provide them with the drawings, quantity lists and subcontractor specifications necessary to finalise the project and allegedly failed to provide them with a new list of all outstanding works.
"Therefore, the first defendant [ministry] made it impossible for the plaintiff [Proven] to finalise the project," Proven's particulars of claim, submitted to the court in March, state.
Proven informed the court that they have been listed as a defaulting creditor by the DBN and are currently unable to secure loans or credit facilities for the operation of their business.
Proven claims to have suffered a projected income loss of N$20 million due to the ministry's alleged "unlawful" breach of contract.
The ministry is also alleged to have acted in violation of the agreement regarding the subcontracting of other companies.
"The subcontractors were mistakenly paid by the DBN and have since abandoned the project."
Communication gaps
Proven also claim to have remained on the project site from July 2015 to January 2022 and incurred costs for security maintenance, payment to workers, and general upkeep of site equipment.
In the past, Proven requested that the ministry arrange for the completion of the project. The ministry reportedly stated that a meeting would be held to address the matter, but no such meeting took place, court documents say.
The parties appeared in court on Thursday, and although the ministry has indicated its intention to oppose the case, it has not yet filed pleadings.
Proven Investments was appointed as the main contractor for the project by the ministry in July 2015. In an application before the Windhoek High Court, Proven accuses the ministry of breach of contract and alleges that the project was never completed.
Proven is demanding approximately N$5.6 million for contractual damages and nearly N$35.6 million for loss of income and unexpected expenses.
Agreement outlined
According to court filings, the contract entered into between Proven and the ministry, the ministry was obligated to compensate the company with approximately N$11.5 million.
In June 2015, Proven entered into a transfer agreement with the Development Bank of Namibia (DBN) and the ministry.
Under this agreement, payment for the construction contract was to be ceded by Proven to DBN and paid directly to the Bank of Namibia. The Bank of Namibia was supposed to make any subsequent payments to Proven and other third parties, court documents indicate.
Proven claims it started construction work in June 2016.
Non-payment impact
They claim that since January 2020, the ministry has failed to make payments to the DBN. They say the ministry also did not provide them with the drawings, quantity lists and subcontractor specifications necessary to finalise the project and allegedly failed to provide them with a new list of all outstanding works.
"Therefore, the first defendant [ministry] made it impossible for the plaintiff [Proven] to finalise the project," Proven's particulars of claim, submitted to the court in March, state.
Proven informed the court that they have been listed as a defaulting creditor by the DBN and are currently unable to secure loans or credit facilities for the operation of their business.
Proven claims to have suffered a projected income loss of N$20 million due to the ministry's alleged "unlawful" breach of contract.
The ministry is also alleged to have acted in violation of the agreement regarding the subcontracting of other companies.
"The subcontractors were mistakenly paid by the DBN and have since abandoned the project."
Communication gaps
Proven also claim to have remained on the project site from July 2015 to January 2022 and incurred costs for security maintenance, payment to workers, and general upkeep of site equipment.
In the past, Proven requested that the ministry arrange for the completion of the project. The ministry reportedly stated that a meeting would be held to address the matter, but no such meeting took place, court documents say.
The parties appeared in court on Thursday, and although the ministry has indicated its intention to oppose the case, it has not yet filed pleadings.
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