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Tuesday 21 May 2019
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Hengari signs direct competition agreement

A Joint Venture Agreement in which Namibia Wildlife Resort (NWR) allowed Sun Karros to put up private accommodation within the resort’s property has sailed through without the blessing of the NWR Board and Ministry of Environment and Tourism.
‘The parties wish to enter into a mutually beneficial relationship wherein Sun Karros will provide and build luxury tented camps and luxury camping (glamping) at Daan Viljoen Game Reserve, Hobas, Sesriem, Namutoni, Okaukuejo and Waterberg and deliver services to NWR who in turn will make available assets, services and workforce to Sun Karros on the terms and conditions set out herein,’ reads the agreement between NWR and Sun Karros.
The agreement will stand for 30 years.
Photographs from the site show that what is supposed to be light, economical and friendly camping is now a fully-fledged lodging facility within the boundaries of NWR, hence is in direct competition with the company.
Product proliferation can lead to cannibalisation of the existing service being offered.
San Karros now has full presence at Sesriem, adding onto venues at Daan Viljoen which they took control of in 2012.
NWR’s managing director Zelna Hengari signed off on the deal on 11 June 2018, less than two weeks after Sun Karros Managing Director Kobus Struwig signed on behalf of Sun Karros. Hengari is said to have inked the agreement without the blessing of the Board which shares the sentiments that the arrangement will have serious repercussions on the tourism industry.
Before the signing of the agreement by Hengari, in the absence of the Board’s approval, the Board held the position that it would conditionally approve glamping.
A Board member who is known to The Patriot told a meeting with the line Minister Pohamba Shifeta, that the Board made a very clear resolution that they would not approve any glamping concept until they had seen business and construction plans and all the details about the agreement with protracted costs.
While the Board and the line ministry searched for legal advice to nullify several joint venture agreements and at the time ordered construction at Sesriem to be put on hold,  all efforts proved futile as the structures now stand and marketing has commenced.
In May 2017, the Board asked the MD for a progress report as to where NWR stood, but were not presented with one. The Patriot further understands that in November of the same year during a Board meeting there was another mention of the request which again fell on deaf ears as Hengari did not avail such information.
It was after a meeting with Minister Pohamba Shifeta last year that the Board learned that Hengari went ahead and signed the agreement which the Board had not approved due to the issues it felt needed to be ironed out before the parastatal agreed to jump into bed with San Karros.

 

“When we got it we strongly disagreed with the contents of that agreement. We cannot support such an agreement. It is a very bad agreement for NWR and for Namibia,” said a Board member. Although glamping agreements are generally convenient in making extra income, there seem to be more questions than answers around this particular deal. One which stands out is how NWR is allowing San Karros to do business on its grounds while it could offer the same service?
Sesriem, Okaukuejo and Namutoni are said to be some of the top tourist attraction centers amongst NWR facilities, strategically located around the country, and San Karros’ presence is well calculated to scoop NWR profits.
Sources privy to what has emerged say the deal has opened the door for Sun Karros to effectively control the domestic tourism sector, now having captured the Sesriem tourism vein and they are anticipated to have footprints at other identified NWR sites.
The Board has since asked Hengari to provide the resolutions on when and how such an agreement had been signed since she alleged that a previous Board has signed a glamping agreement already and that she did not need any further resolutions.

 

To date the Board has not received any such agreement and a Joint Venture Agreement between San Karros and NWR which The Patriot is in possession of explicitly shows that it was indeed Hengari who signed the agreement.  Although profits and losses will be shared equally by both parties, NWR is under scrutiny for permitting Sun Karros to do business of the same nature on the same grounds.
The agreement stipulates that NWR will specifically and actively market and promote the product to both local and international travel markets and make bookings and reservation at the Tented Camp and Sun Karros will pay NWR 10% commission on total value of bookings placed at tented camps of NWR.
Swapo’s commercial arm, Kalahari Holdings is in a joint venture with Sun Karros, which has a 50 to 99-year lease agreement with state-owned Namibia Wildlife Resorts to run Daan Viljoen Game Park, which is located 20km west of Windhoek.
When put to Shifeta telephonically this week, the Minister said he awaits on the NWR board to deal with anything done unlawfully at the parastatal. Although he is aware that his Ministry was not consulted he has put the onus on the Board to deal with the matter, saying it is not the Ministry’s role to involve itself in the management of micro issues of the parastatal when there is a board in place.
“Whether the MD has signed and it was done without the approval of the Board, the Board should answer and find a solution to the matter,” he said.
He further stressed “when anything is done by management, it is done through the Board, so the management must clean their house and not to come to us and complain. They have the powers to rectify the situation and that is why they were appointed by the shareholder. So I will be waiting for them to come and present how the company will benefit from this agreement also.”




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