The Supreme Court has upheld a High Court decision to cancel a N$211 million contract awarded by Namibia Airports Company (NAC) to a Chinese-owned company to upgrade the Andimba Toivo Ya Toivo Airport, formerly known as the Ondangwa Airport. Deputy Chief Justice Petrus Damaseb, appeal judges Elton Hoff and Theo Frank ruled that the process and manner in which the tender for phase 2 was awarded was not transparent.
Thus, any contract that came into existence between NAC and China State Engineering Construction Corporation (China State) on 24 June 2016 is invalid and consequently set aside.
“The manner in which the award was made does not meet the most basic tenets of transparency and accountability and judicious use of public funds,” said Damaseb. Last year, the High Court ruled that NAC’s old board breached the procurement policy, while senior executives made misrepresentations to the board. Furthermore, the board failed to apply their minds to important matters, including the absence of approved funds for the project. The old board took the decision on 23 June 2016 to award the tender for phase two to China State. However, on 1 September 2016, the new board sought to have the decision reviewed and set aside, as the NAC became aware that its decision-making was tainted with illegality. In 2017, former NAC acting CEO Lot Haifidi claimed in an affidavit that the awarding of the contract to China State was marred by irregularities.
In addition, the China State was awarded the tender without going through a competitive tender process. Haifidi further claimed that apart from NAC not complying with the procurement policy, the parastatal had no provision in its budget for an expenditure of N$211 million on a further upgrade of the northern airport. China State was appointed in December 2014 to carry out phase one of an upgrade of the airport at a cost of N$208 million of which the work was completed in July 2016. Haifidi claimed then CEO of the NAC Tamer El-Kallawi and then head of the parastatal’s department of engineering and projects Courage Silombela, wanted China State to continue with phase two. Court documents state in September 2015, these two executives discussed the matter with Aurecon consulting engineers who were then asked by either or both NAC executives to prepare a preliminary design for phases 2 and 3 together. Aurecon produced that on 5 April 2016, which was passed on to China State who then furnished NAC with a quotation on 18 April 2016 in the amount of N$168.5 million. Silombela and El-Kalawi jointly prepared a submission to the former board for its meeting of 27 May 2016, for the appointment of China State as the contractor for phase 2, and authorisation of payment to China State of N$200 million. However, the board approved a submission, of N$211 million and not the initial N$200 million. In this regard, the court questioned why there was a fluctuation in the bills of quantity. “It is precisely for that reason that procurement policies exist - to give the public the assurance that it gets value for money and that there was no manipulation because the process was competitive,” noted Damaseb. China State has been ordered to pay the legal fees of the NAC.