NAC against N$211m upgrade decision

THE Namibia Airports Company might have to wait until June next year to hear if it has succeeded in getting the High Court to cancel the choice of a Chinese-owned company to upgrade the Ondangwa Airport at a cost of N$211 million.

After hearing oral arguments on an application by the NAC to have a June 2016 decision of the parastatal’;s previous board reviewed and set aside, judge Thomas Masuku yesterday reserved his judgement and set 3 June next year as the target date by when his judgement should be delivered. Judge Masuku said he would try to have his judgement ready before that date, though.

The NAC is asking the court to review and set aside a decision that the NAC board of directors took at a meeting on 23 June 2016, when the board awarded a tender for an upgrade of Ondangwa Airport to the company China State Construction Engineering Corporation (China State). The airports parastatal is also asking the court to declare that any contract between the NAC and the Chinese company that may have been created as a result of the board’;s decision has been void from the start or is invalid.

In an affidavit filed at the court, the acting chief executive officer of the NAC, Lot Haifidi, says the NAC’;s procurement policy was flouted when the board decided to award the Ondangwa Airport upgrading contract to China State without going through a competitive tender process.

Haifidi claims the award of the contract to China State was marred by irregularities committed by the then CEO of the NAC, Tamer El-Kallawi, and the then head of the parastatal’;s department of engineering and projects, Courage Silombela, with the aim of getting the board to approve the award of the project to China State without following the NAC’;s prescribed tender procedures.

By not complying with the NAC’;s procurement policy, the NAC board acted unlawfully and irregularly, and exposed the parastatal to a risk of serious financial difficulties, as no provision had been made in the parastatal’;s budget for expenditure of N$211 million on a further upgrade of the Ondangwa Airport, Haifidi also alleges in his sworn statement.

China State was appointed in December 2014 to carry out a first phase of an upgrade of the airport, at a cost of N$208 million. Work on that phase was completed in July 2016.

Haifidi claims it was clear that Silombela, supported by El-Kallawi, wanted to keep China State as the contractor for a next phase of the airport upgrade project “at any cost and therefore manipulated the process to achieve this”, by creating a situation to avoid competitive tenders being called for the next phase.

He also alleges that it was never made clear how the project cost of N$211,6 million approved by the board was arrived at, and points out that project engineers Aurecon Namibia in April 2016 prepared an initial project cost estimate of N$169,9 million for the NAC.

Referring to the escalation of the project cost, senior counsel Rafik Bhana, representing the NAC, argued yesterday that it was clear something was going on behind the scenes and that a manipulation of the price of the project had taken place. It was “mind-boggling” that the cost of the project could have escalated by more than N$40 million in a matter of about nine weeks, he commented.

“It really stinks, if one can use that expression,” Bhana said.

He argued that a competitive tender process would have enabled the NAC board to see what the market-related cost of the airport upgrade would have been.

The material deviations from the NAC’;s procurement policy were sufficient grounds to have the board’;s decision set aside, but in the matter at hand the directors’; decision was further undermined by misrepresentations made to the board, Bhana argued.

Senior counsel Vincent Maleka, leading the legal team representing China State, argued that the NAC delayed the launch of its review application for an unreasonable period of 17 months, and did not properly explain that delay in taking legal action.

Maleka also reminded the judge of an agreement allegedly signed by former NAC board chairperson Rodgers Kauta – he chaired the board that took office at the start of September 2016 – and a representative of a Turkish company in January 2017, in which Kauta supposedly agreed to endeavour to have the tender award to China State cancelled and to have the contract put out on tender, for a “commission” payment of N$6 million.

Kauta has dismissed the agreement as bogus, and denied that he made such an agreement.

Maleka argued, though, that the alleged agreement raised serious allegations of fraud and corruption that showed a lack of good faith on the part of the NAC. He asked judge Masuku to refer those allegations to the Anti-Corruption Commission for an investigation to be carried out.

Unanisa Hengari and Andrew Rowan also represented the NAC, on instructions from Clive Kavendjii. Sakeus Akweenda and Eliaser Nekwaya represented China State with Maleka, on instructions from Ray Rukoro.

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