MULSP issues clarified

Additional details pertaining to and audit report on the Mass Urban Land Servicing Project have been revealed.

10 September 2021 | Infrastructure

Trevino Forbes; Mayor; “The report does not refer to individuals that may have benefited; neither does it implicate any official…”

Walvis Bay • [email protected]

Mayor Trevino Forbes again provided some clarity on a number of issues related to council.

Speaking about the Mass Urban Land Servicing Project (MULSP), Forbes confirmed that the suspended officials have returned to work. He said that their suspension was to ensure a smooth and unhindered investigation into procedures related to the MULSP.

Forbes emphasised that the audited report compiled by PwC does not refer to individuals that may have benefited, or that it implicates any official, but rather refers to processes within the project.
He said that at this stage it is premature to determine whether there are individuals who may have benefited from the project.

“The recommendations also include a broader scope of investigation into the administrative process in some of the properties.”

He stated that it is imperative for council not only to determine if anyone benefited, but also if the procedures followed yielded satisfactory results for the municipality and project beneficiaries.

The mayor pointed out that upon completion of the audit report, PwC clearly stated that it was prepared solely for use by council and as such, it should not be disclosed to any other party without their consent, which they may at their discretion, withhold or give subject to conditions.

“Council has requested the public release of the report, without any success from the auditor. Their reservation is due to the fact that their report was not prepared with publication in mind. They are concerned that releasing the report will extend the duty of care to the wider public, or at least create an expectation that PwC owes a duty to the public at large. They are further concerned that it may prejudice the investigation and further actions required,” he explained.

Forbes stated that council had resolved that an external HR specialist, assisted by a legal entity if necessary, be appointed to do further investigations into the specific matters as addressed in the recommendations contained in the report and that the required authorization for this be granted to the mayor.

“Initially, the report was to be finalized within six weeks. However, it was a challenge for the auditors to obtain external information from the conveyancer.”


Council constructed 749 houses with a calculated combined value of about N$236 million.

According to the audit report, the net over recovery of erven sold by the municipality based on construction information and sales agreements, was 30 properties with a financial impact of N$500 693.

No formal appointment or recruitment process was followed during the appointment of contractors for all 749 properties.

There was also a net under valuation of certified construction values, as building certificates of completion (BCOC) values were less than the agreed equivalent construction cost rates per square meter for 90 properties with a financial impact of about N$12.5 million.

Payment of about N$20.7 million was made to contractors as per payment schedules, on 26 properties for which no completion certificates were provided.

Deductions not made by the municipality on payments to contractors, in respect of social contributions and payments of 5% retention as per payment schedule, amounted to about N$2.5 million.
The aforementioned refers to phase one properties, which the conveyer paid to the builders.


Net overpayment on certified construction values for 140 properties, as building completion certificate values were less than payment schedule, amounts to N$12.6 million. Net underpayment made to contractors as per payment schedules, as the total value of construction is less than expected, based on the agreed rate per m² for 59 properties, amounted to N$61 700.

In relation to properties sold, 29 properties were sold by the municipality, however sales could not be verified due to outstanding sales agreements.

A net under recovery of construction costs from 70 property sales was recorded, as the payments made to contractors are less than the costs raised in the sales agreements, amounting to N$601 525.

Net under recovery of 36 properties sold by the municipality based on receipts confirmed in the municipality’s bank account, amounted to N$39.6 million.

Forbes added that due to issues identified with respect to payments made to contractors for 140 properties, which relates to a net overpayment of building construction costs, the auditors made a number of suggestions.

“This included that a thorough understanding be obtained on the processes followed for the identification, selection and appointment of these contractors; and the basis on which properties were allocated, for the construction of buildings, between the various contractors and subsequent payments made.”

It was also suggested that based on the roles and responsibilities of staff as detailed in the job descriptions for those positions, council identify whether there were any instances of unauthorised exercise of authority and/or potential misconduct by such staff, pertaining to their involvement in the project.

The auditor also recommended that procurement procedures, administrative roles and responsibilities, accounting and record-keeping and transfer of property be improved.

What will happen with the remaining empty houses pertaining to the MULSP will be announced in due course.

“However, we can assure the public that these houses will not be sold via public auction,” Forbes said.