Sankwasa orders probe into Walvis Bay RedForce deal…Minister demands contract halt, recovery of funds and investigation into councillors

Renthia Kaimbi

The legality of the Walvis Bay Municipality’s debt collection agreement with RedForce Debt Management has come under renewed scrutiny, with urban and rural development minister James Sankwasa ordering the council to halt the contract.

The municipality’s management committee chairperson, Ephraim Shozi, agreed that the agreement is invalid because it was not executed in accordance with the Local Authorities AcSankwasa, in a letter dated 10 September 2026 addressed to Walvis Bay mayor John Shimhilinga, directed the municipality to stop expenditure linked to the RedForce agreement, recover funds allegedly wasted through the contract and act on an Attorney General’s legal opinion by 30 September.

Shozi, while speaking to the Windhoek Observer yesterday, said the contract failed to meet the statutory requirements governing contracts entered into by local authorities.

According to Shozi, Section 31A of the Local Authorities Act requires a valid municipal contract to be signed by the chief executive officer and co-signed by the chairperson of the management committee.

He said the RedForce agreement did not meet either requirement.

Instead, he said, the agreement was signed by the municipality’s general manager of finance, Frans !Gonteb and acting chief executive officer, John Esterhuizen.

“It was only signed by the technocrats, including the acting chief executive officer. It was not co-signed by the former management committee chairperson,” Shozi said.

“Neither of these positions possess the legal authority under Section 31A of the Act to execute or validate such an agreement,” he added.

Shozi’s position mirrors concerns raised by Sankwasa, who cited an Attorney General’s opinion that the agreement was “flawed and not valid”.

Sankwasa said the fact that the procurement process resulted in an award did not automatically validate the subsequent contract.

“Reliance on the provision of the Procurement Act award letter is legally fatal as the CEO is only authorised to issue an award and not a contract which is not co-signed as legally required,” Sankwasa wrote.

Shozi said the controversy was not new, claiming that he had raised similar concerns during his first term as a councillor.

He said he had previously moved a motion seeking to separate the municipality from RedForce, which he described as a “divorce”, because the agreement had allegedly been entered into without a supporting council resolution.

Shozi said he had also sought a formal legal opinion from the Attorney General at the time.

“However, because we were in the minority at that juncture, our warnings were dismissed,” he said.

He further alleged that the Independent Patriots for Change (IPC)-led coalition had outvoted the motion and “actively ignored” the Attorney General’s legal advice.

The RedForce agreement has also attracted scrutiny over the collection of municipal debts from residents.

Sankwasa alleged that RedForce was charging residents additional collection percentages on top of amounts owed to the municipality, raising questions over compliance with the Usury Act 73 of 1968.

The minister also questioned the legal basis for RedForce collecting money from residents who have no direct contractual relationship with the debt collection company.

He further raised concerns over the disconnection of water services from residents who had allegedly settled their municipal accounts but had not paid the additional RedForce charges.

“The situation is worsened by the illegal disconnection of water services to residents in instances where residents might have paid the municipal bills but not the illegally charged percentage of RedForce,” Sankwasa stated.

The minister has also questioned the conduct of councillors and senior municipal officials who he said had continued defending the RedForce agreement.

“The way Councillors and senior staff members defend a legally invalid contract smells of a financial rat,” Sankwasa wrote, questioning whether councillors defending the company could have a financial interest in the arrangement.

He said the circumstances warranted a forensic investigation into the municipality’s operations and referred to Section 20 of the Local Authorities Act, which prohibits councillors from accepting bribes or commissions.

Shozi, however, said his position was based on the need to uphold statutory requirements rather than political considerations.

“An agreement executed in direct violation of the Local Authorities Act cannot stand,” he said.

“The municipality of Walvis Bay cannot be bound by an instrument that willfully ignores the law and relies on unauthorised signatures.”

He said the municipality should uphold the rule of law, protect public funds and ensure compliance with legislation in all council operations.

The dispute also follows a High Court case involving WENA Investment, the Walvis Bay municipality and RedForce.

A High Court order dated 3 September 2026 in case HC-MD-CIV-MOT-GEN-2026/00366 ordered the municipality to refrain from disconnecting the applicant’s water supply and awarded costs to the applicant.

Sankwasa has directed the municipality to cease unnecessary expenditure related to the RedForce contract and recover money allegedly wasted through the agreement from councillors he accused of failing to protect residents and government interests.

He has also demanded a report from the council detailing the steps taken to comply with his directives.

The correspondence was copied to the deputy minister, the executive director in the line ministry and Walvis Bay councillors.

The minister also criticised the IPC over a statement allegedly issued on 10 September, saying the party “does not care about the sufferings and interest of the Walvis Bay residents”.

“The way Councillors and senior staff members defend a legally invalid contract smells of a financial rat. Why would councillors elected to advance development so much defend a Company at the expense of the electorate if such Councillors do not have their hand in the RedForce cash till? This behaviour is now forcing me to institute a forensic investigation into the operation of Walvis Bay municipality by ensuring adherence to the provisions of the law as above mentioned,” he said, while demanding a report detailing the steps taken by the council to comply with his directives.