N$400 million diamond valuation deal unresolved
THE Windhoek High Court has yet to pronounce itself on the controversial N$480 million diamond evaluation tender awarded to Gem Diamonds Namibia in 2019.
Global Diamond Valuators Namibia sued the Central Procurement Board of Namibia (CPBN), the review panel and the mines ministry over their decision to award the multi-million-dollar tender to Gem Diamonds Namibia, who according to them had failed to comply with the bidding criteria.
Gem Diamonds Namibia was awarded the N$480 million contract in May 2019 for a five-year period, and has since received N$96 million per year for its services. The contract was concluded on 8 August 2019.
The mines ministry appoints a government diamond valuator to ensure that Namibian diamonds are not sold cheaply.
The valuator evaluates the diamonds received from the Namibia Diamond Trading Company (NDTC). NDTC receives diamonds from De Beers. The tender has been clouded with allegations of favouritism, overpricing and doctoring of scores.
In its suit, Global Diamond Valuators Namibia, which has been evaluating diamonds on behalf of the government since 2009, claims the CPBN erred in awarding the tender to Gem Diamonds Namibia, which is asking N$60 million to N$80 million more than what they are currently charging the ministry.
Global Diamond Valuators Namibia asked for N$233 million to evaluate the diamonds, but were ranked sixth amongst the bidders. The top three shortlisted companies were Gem Diamonds Namibia, which scored 97.50%; Prestige Diamonds, the second- highest with 97.12%; and Kings Diamond, the third-ranked bidder with 95.31%. According to them, Gem Diamonds Namibia should never have gotten the tender as they failed to provide a total bid price on submission, amongst other things.
Global Diamond Valuators Namibia approached the High Court after the review panel dismissed their review application in July 2019.
In its ruling, the panel stated that there was no evidence that the awarding of the tender was marred by irregularities.
Now, Global Diamond Valuators Namibia wants the court to review and set aside the panel’s ruling, citing that they “failed to address the pertinent issues raised in the applicant’s review application relating to the failure by Gem Diamonds to disclose a total bid, its lack of technical expertise, and the failure by the BEC and the board to take into account that Gem Diamonds’ bid was 30% more expensive than that of the applicant”.
The company also wants the court to review and set aside the award, and any agreements that may have been entered into by the mines ministry and Gem Diamonds Namibia.
However, the CPBN has since denied the allegations. In court documents, it claims that it would not be in the interest of the public to cancel a tender that is nearly coming to an end. Thus, the court must use its discretion and decline to set aside the award and the procurement contract due to such circumstances.
According to the CPBN, there is not enough evidence to back Global Diamond Valuators Namibia’s claims as the bidding and awarding were done in compliance with the law.
However, should the court find the award invalid, the tender must not be cancelled.
“The court ought to refer the matter back to the first respondent for reconsideration. In that respect, the award must stand until such time that the first respondent has made a new award,” submitted the CPBN.
They further stated that Gem Diamonds Namibia has been evaluating diamonds since 2019, and was paid for its services.
“We respectfully submit that the appropriate remedy is to suspend the declaration of invalidity or unconstitutionalit,y and allow the first respondent to re-evaluate the bids in accordance with the award, or start the procurement process afresh,” added the CPBN. The board claims setting aside the award without any measures in place will result in chaos.
The parties were represented by Andrew Corbett and Eliaser Nekwaya, respectively.
Judge Eileen Rakow will give a ruling on 28 March after indicating last week that it was not ready.