Monday 12 April 2021
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Airport tender, Quo Vadis?

By Mathias Haufiku

Government needs to make a determination on whether there is still need upgrade and expand the existing Hosea Kutako International Airport, attorney general Sacky Shanghala has said.
Shanghala said this when he issued a legal opinion earlier this month in which he urged government to decide if the project is still a priority. More so, he wanted to know how NAC would fund the project in the event that it refuses to start the process afresh as per the wish of government. Shanghala said: “Determinations need to made whether the project is still a priority for the country or the NAC; if government will instruct NAC to cancel the tender and commence the process anew; whether NAC is empowered in terms of its tender policies and procedures to cancel the tender at this stage and does the fact that Anhui is in possession of the Board of Directors decision present any legal impediment to cancellation and if NAC is required as a public body to provide     reasons for its determination to cancel the tender, if it so decides.” “If the NAC Board of Directors takes the position that its processes were followed adequately and is not inclined to cancel the tender, what options does it have for funding, given that the government position as articulated by the President’s press statement and the Minister of Finance’s position seek a new process, failing which there will be no Government backed funding,” he said. He said there is need for government to provide clear policy directives on the project (if it is still needed; if so, what is the scope of such; how financing will be arranged). He also indicated that NAC should assess its legal options and engage with the Ministry of Works and Transport, as well as the Minister of Finance for directives.

The genesis
In June 2014 the Namibia Airports Company(NAC) placed an advertisement in the local media inviting expressions of interest from interested bidders towards a planned project to upgrade and expand the existing Hosea Kutako International Airport (HKIA). Anhui Foreign Economic Construction Group Corporation Ltd was one of the bidders.  Along with other bidders, Anhui was shortlisted until it was determined by the Tender and Technical Committee of the NAC as a preferred bidder. A recommendation to this effect was made to the Board of Directors by the Tender and Technical Committee of the NAC. The NAC Board of Directors resolved to regard Anhui as the preferred tenderer/bidder. Notwithstanding the decision taken by the NAC Board of Directors, NAC did not make an award as required in law or in terms of NAC’s own Tender Policies and Procedures. Instead, the NAC corresponded with the Minister(ry) of Works and Transport (hereinafter referred to as “MoWTC, informing the Minister that they had conducted a process which led to the selection of Anhui as a preferred bidder/tenderer, and before it proceeds to make an award, sought confirmation of the availability of funding for the purposes of the upgrade and expansion of the HKIA.

In terms of our law, an award can only be made once a body (or Committee or Board) entitled to make such an award properly takes such a decision and communicates it to the concerned tenderer, or the decision is otherwise properly made public for the purposes of notification of award. Until a decision such as an award has been adopted (or even made) and such remains un-communicated to the successful tenderer, such decision in the eyes of the law is not an award and no tenderer obtains any right thereto.  The Minister of Finance started certain processes aimed at securing a loan from the China State-Owned Export Import Bank with the Government of Namibia as the borrower and the aforesaid bank as the lender in order to fund the Project in 2015.The tender was awarded despite the fact that there was no Treasury approval granted before.
However, before the Minister of Finance completed that process, the Permanent Secretary: MoWT proceeded to purportedly award the tender to Anhui on 3 December 2015. The High Court ruling in this matter found that this purported award by the Permanent Secretary: MoWT did not in law or fact amount to an award. In the Supreme Court, the Judgment finds that indeed the PS: MoWT’s purported award was an award, albeit unlawful and invalid, and set aside the award. Anhui approached the High Court seeking an order reviewing and setting aside the decisions and actions of the Minister of Works and Transport and the President of the Republic of Namibia to cancel all the activities relating to the upgrade and expansion of the Hosea Kutako International Airport.

Orders declaring the Minister of Works and Transport’s action unlawful and invalid as well as a final order declaring the award, on 3 December 2015, by the Namibia Airports Company to the applicant for the contract to upgrade or expand the Hosea Kutako International Airport as valid were also sought. All these efforts were in vain after the High Court found that while the Minister’s directive was well-intended “it was unfortunately flawed both in substance and on a procedural basis, and therefore declared it invalid and set it aside.”
The court also found that there was not sufficient evidence before the High Court to prove that an award of a tender by the works ministry was made; and as a result of the above finding, the High Court could not hold that there was an award by the NAC on December 3, 2015 relying on the PS conduct as agent of the NAC.
According to Shanghala, the first things that need to be said and rendered as advice to Government is that when tenders are awarded by Government acting in its own capacity, they ought to be arrived at through a process sanctioned under the Tender Board of Namibia Act, 1996 before April 1, 2017 and post such, the Public Procurement Act, 2015 (Act No. 15 of 2015).
Shanghala said when Government funds a project being conducted by a Public Enterprise, such does not amount to Government procuring services or goods in its own right.
The decision to award the tender to Anhui by the NAC Board of Directors was not communicated but it was put into the public domain through the process of discovery of the record in the matters before the High and Supreme Court. “Whether or not any rights arise as far as Anhui is concerned is a matter that will require deeper interrogation from a legal point of view,” said the AG.

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