A company linked to the Swapo Party, Sun Karros, has landed itself a 30-year deal that enables it to make use of Namibia Wildlife Resorts(NWR) assets for the next 30 years at no cost.
Under the joint venture agreement signed last month, several luxury facilities will be constructed at NWR controlled jurisdictions within the various national parks.
In its zeal to gain more dominance in the domestic tourism sector, Sun Karros has taken the opportunity with both hands and construction work has already started at down south at Sesriem, despite the JV agreement only being signed last month.
Sources at Sesriem informed this publication that a lodging facility that could directly compete with the NWR-controlled Sesriem is being constructed just a few meters away.
This comes years after Sun Karros got the mandate to take-over the popular Daan Viljoen resort outside Windhoek.
It was also well known that the fragmented ownership embodied in the agreement that led to Sun Karros take-over of the popular Daan Viljoen resort, meant most Namibians could not afford to visit the facility anymore because the benefits locals enjoy in terms of cost at NWR facilities are not applicable at the Sun Karros-managed resort. Sun Karros Daan Viljoen opened its doors in 2012 after extensive renovations.
Sources briefed on the process told The Patriot that the deal has paved the way for Sun Karros to effectively control the domestic tourism sector, if it manages to execute its grand plan to have a footprint at the identified NWR sites.
The agreement states that NWR should make its assets available to Sun Karros at facilities such as Daan Viljoen, Namutoni, Okaukuejo, Hobas, Sesriem and Waterberg.
Approached for comment yesterday, NWR spokesman Mufaro Nesongano asked for more time to respond to the questions sent to the parastatal.
“After going through them[the questions], and in keeping up with our values of being transparent, we would like to request your understanding in providing us with the opportune moment to provide you and the public with the information pertaining this new and exciting venture,” Nesongano said.
Contents of the deal
NWR’s managing director Zelna Hengari signed off the deal on 11 June 2018, less than two weeks after Sun Karros managing director Kobus Struwig signed on behalf of Sun Karros.
One of the negotiation players told The Patriot that an agreement was reached regarding the usage of the facilities, although NWR has its reservations, further indicating that the two parties are still ironing some contents of the agreement.
The source said the investment could have repercussions on domestic travellers as well as NWR which could be put under pressure—especially at a time when Namibians continue to contribute immensely to the country’s booming tourism times.
Described as a “mutually beneficial business relationship”, “Sun Karros will provide and build luxury tented camps and luxury camping at Daan Viljoen Game Reserve, Hobas, Sesriem, Namutoni, Okaukuejo and Waterberg and deliver services to NWR and NWR will make available assets, services and workforce to Sun Karros on the terms and conditions set out herein.”
The joint venture is an unincorporated partnership between the two parties.
The first camps will be built in Sesriem followed by Hobas.
It is not known how much control and influence NWR will have in the venture because, under the agreement, all business shall be conducted solely under the name of Sun Karros Lifestyle Safaris. Only sales and marketing material will reflect the partnership with NWR.
Regarding the luxury camps, Sun Karros will be the exclusive partner for the development and building of the products and related activities.
Secrecy concerns raised
The deal has gone from obscurity to something of a talking point following claims that the deal benefits the ruling party more than it benefits the country. NWR has over the years been one of the few parastatals that publicise their activities and secrets usually do not stay under wraps for very long. This time, it seems that senior NWR officials have kept details of the joint venture tightly under wraps.
One NWR employee said this week that there has been “a lot of talk about this joint venture but no one knows exactly what is going on. It’s a big secret.”
“Most of the employees do not know about this agreement and we suspect that some people in management are compromised.
The construction in Sesriem has already commenced and it is just metres away from the NWR camp which means it will be in direct competition with NWR,” said the source. The source further indicated that the scope of the project has since been changed “as it seems like a fully-fledged lodge is being constructed”.
Government on alert
The lack of transparency about how the agreement will be executed has led most of the people interviewed to question whether taxpayers will benefit in the true sense.
The Patriot understands that Treasury and the Ministry of Public Enterprises(MPE) met with NWR officials last week to discuss the joint venture, almost a month after it was signed off.
Public Enterprises minister Leon Jooste this week said the ministry is looking into all Joint-Venture agreements of Public Enterprises, those entered into in the past and the recent ones.
“The purpose is to make sure that due process was followed in line with the individual Statutes, Public Enterprises Governance Act, State Finance Act, Procurement Act or the Public-Private-Partnership Act as may be applicable.
We will also evaluate the business case of each one of these to determine whether favorable agreements were concluded or not,” he said. Contrastingly Minister of Environment and Tourism feigned ignorance saying he is not aware of this agreement adding that he will look into the matter with haste.
“Perhaps this was authorised by my predecessor,” said Shifeta. Although government has identified tourism as a way to create jobs and boost the economy, critics fear the joint venture stands to benefit Sun Karros more than it will benefit NWR. Sun Karros, to which NWR has availed its assets such as camp sites and vehicles over the years and is increasingly becoming a driving force in the domestic tourism arena.
The political connections
The deal once more highlights how the ruling Swapo Party has managed to successfully channel state resources to boost its purse. Swapo’s commercial arm, Kalahari Holdings is in a joint venture with Sun Karros, which has a 50 to 99-year lease agreement with state-owned Namibia Wildlife Resorts to run Daan Viljoen Game Park, which is located 20km west of Windhoek.
The Namibian in 2015 reported that Kalahari and another Swapo company called Zebra hold their stakes in Daan Viljoen via Oryx Investments. Oryx in turn is a 20% shareholder in San Karros Lifestyle Safaris.
The joint venture comes as no surprise to those who have over the years lamented that government contracts tend to go in favour of the ruling party’s businesses that enter into secret and questionable deals with private companies under the disguise of Public-Private Partnerships.
NWR boss Zelna Hengari is well-known in the Swapo circles, having been appointed to the ruling party’s think tank in 2014. Her contract at NWR comes to an end next year.