/ 27 July 2009

Chinese ‘diplomacy’ exposed

In yet another example of sharp Chinese diplomatic elbows in African business it has emerged that the China National Machinery & Equipment Import & Export Company (CMEC) tried to charge Namibia nearly four times the going rate for the installation of a rail link to the Angolan border town of Oshikango.

On Wednesday the chief of the Namibian Defence Force, General Martin Shalli, was suspended by President Hifikepunye Pohamba in connection with an alleged $250 000 (R1,9-million) kickback from a Chinese company.

Shalli is suspected of taking the bribe while serving as Namibia’s high commissioner to Zambia, in return for facilitating an arms deal.

Documents obtained by the Mail & Guardian show that CMEC offered to complete the 60km link between Ondongwa and Oshikango for a whopping R1,063-billion.

Since 2005 it has cost about R900-million to complete the first 250km from Tsumeb to Ondangwa.

The new section was to be financed under a special $100-million ”concessional loan” facility, offered by Hu Jintao, the Chinese president, during his visit to Namibia early last year. The same facility was to be used for a controversial industrial X-ray equipment deal that is now threatening to engulf Hu’s son, Haifeng, as well.

In a memorandum to his seniors on April 19, Robert Kalomho, the acting railway director, pointed out that the Chinese offer was more than four times as much as a bid from a local company, partnering with Italian industrial giant Lucchini.

The Chinese wanted R290-million for the rails and R773-million for the installation, documents showed. By comparison, the competitors had offered to do the same job for a total of R250-million, Kalomho noted.

The budgetary allocation of R300-million was clearly not sufficient, Permanent Secretary George Simaata noted in another letter to the ministry of finance. Making use of the concessional loan was therefore risky because of possible foreign exchange fluctuations.

”Unfortunately, we are not aware of all the conditions attached to this loan money [in respect of] …the interest rates, repayment conditions, loan duration etc,” he wrote.

No comment was immediately available from the Chinese embassy.

Meanwhile, the three suspects held in connection with the alleged R42-million Nuctech kickback on Wednesday apparently preferred another week in jail. A much-anticipated court appearance by public service commissioner Teckla Lameck (49), her business partner Jerobeam Kongo Mokaxwa (30) and Yang Fan (39), a Chinese national, in the Windhoek Magistrate’s Court to apply for bail was postponed by their lawyer, Sisa Namandje, to Tuesday.

Although Namandje did not return calls, court officials said he had asked for more time to allow for a legal challenge on Friday in the high court to set aside a seizure order issued last week under the Prevention of Organised Crime Act (Poca).

The state is opposing their bail applications and also the challenge to the Poca order, deputy prosecutor-general Dan Small said.
Lameck and Yang were arrested a week ago after it was discovered that $4,2-million (R32,7-million) of a $12,8-million ”manufacturing deposit” was paid to Lameck’s company, Teko Trading, within a week of the ministry of finance payment in early March.

Yang, who received more than R16-million, splurged R2,8-million on deposits for Cape Royal golfing estates, while other large amounts were deposited on credit cards.

The botched deal provided a tantalising look into the inner workings of the Chinese Communist Party and its brand of African diplomacy. Until last year Hu Haifeng (38) was president of Nuctech in China.

He has since been promoted to party secretary of Tsinghua Holdings, the state-controlled firm that runs Nuctech and 30 other Chinese companies.

Namibian prosecutor-general Martha Imalwa earlier travelled to China to discuss this and another, as yet unknown, case with her Beijing counterparts, her office confirmed. But she was ill and could not be reached for comment.

Although Hu is not a suspect, China’s censors have been blocking all web searches in China related to the unfolding scandal in Africa, Hong Kong-based Chinese IT expert Rebecca McKinnon said this week.