Govt blunders favour Chinese

03 March 2017 Author   Sonja Smith
front airportA series of Government blunders, including an executive decision by President Hage Geingob, has culminated in a Supreme Court battle, in which Government faces the very real prospect of being forced to go ahead with the inflated N$7 billion Hosea Kutako International Airport tender.
The Supreme Court is expected today (Friday) to hear arguments in the case in which Government is appealing a High Court ruling in September last year in favour of Chinese company, Anhui Foreign Economic Construction Group.
Judge Shafimana Ueitele found in his September ruling that Government had acted “unlawfully” when the directive to cancel the tender, came from the president and not directly from the line minister, or the NAC Chief Executive Officer, Tamer El-Kallawi.
Legal experts who spoke to the Windhoek Observer on condition of anonymity this week said Government will in all likelihood be forced by the highest court in the land to go ahead with the project, which will put an already cash-strapped nation in further debt.
The lawyers argued that Government has little to no chance of winning the court battle, as President Geingob shouldn’t have intervened when he instructed the Minister of Works and Transport, Alpheus ǃNaruseb, to cancel the airport tender, without the legal mandate to do so.
“If they lose the appeal case, then unfortunately the contract will have to continue. Judge Ueitele already found that the cancellation was done unprocedurally.
“The NAC has its own rules and respective powers that guide them in making decisions. This is the time for the Executive to learn a lesson, and the lesson to be learned from this is that they should know and understand their limitations and powers, when it comes to interfering in another organisation’s business,” the lawyer said.
Another lawyer also argued that Government, as it stands, has no legal leg to stand on, and that it will likely lose the Supreme Court case.
He said, as a result, both the Chinese company and the Government will have to renegotiate new terms for the tender.
“If Government loses, the Chinese company is still entitled to get the airport tender, and Government will not be allowed to give the tender to any other company, but they still need to renegotiate on the commercial terms of the deal,” the lawyer said
Anhui Foreign Economic Construction Group won a case against Government in the Windhoek High Court last year after President Geingob had instructed !Naruseb, to cancel the company’s successful tender to expand the Hosea Kutako International Airport, citing irregularities in the manner in which it was awarded by the NAC.
Judge Ueitele ruled that Government had acted “unlawfully” when the directive to cancel the tender came from the president, and not directly from the line minister, or the NAC CEO.
The judge further reasoned that the minister of works acted outside the law by abdicating his authority when the decision to cancel the tender came from the president.
He said a discretionary power vested in one official or body, may not be usurped by another, whether the former is subordinate to the latter or not, and thus the minister acted unlawfully when he cancelled the tender.
Judge Ueitele also found that !Naruseb did not satisfy the conditions in Section 9 of the Airports Company Act of 1998, before exercising the powers given to him. 
Ueitele said that the minister could only have issued the directive, if he considered it necessary in the interest of national security, or for the discharge of an international obligation of the State.
“It is clear that the minister concedes to the fact that he was instructed by the president to instruct the Namibia Airports Company to discontinue all activities related to the upgrading of the Hosea Kutako International Airport,” Ueitele wrote in his judgement.  
“The applicant argued that the Namibia Airports Company, like all other companies, has the power to negotiate and conclude contracts, and that this fact is not only made explicit in the Act, but also recognised by the internal Procurement Policy and Procedures of the Namibia Airports Company.
“The applicant thus submitted that the Namibia Airports Company must act independent from external influence or interference or both external influence and interference by, or at the hands of the minister.
“The applicant, however, recognises the fact that the minister has some limited powers of intervention in the management of the affairs of the company, but argued that the minister can only intervene or interfere where he (the minister) considers it necessary for, or expedient to, the national security or for the discharge of an international obligation of the State to do so.
“But before the minister issues his instructions, he is required to first consult with the Minister of Public Enterprises and the Namibia Airports Company,” the judgement further read.
The judge also threw out the argument by Finance Minister, Calle Schlettwein, that !Naruseb was acting well within his powers when he cancelled the tender, because it was a Government project, to be funded by the State.  “If the financing of the services to be rendered to the Namibia Airports Company was to be done by the Government of the Republic of Namibia or to be sourced or guaranteed by the Government of the Republic of Namibia, that fact will in my view still not turn the services that are to be rendered into services rendered on behalf of the Government of Namibia,” the judge reasoned.
“It thus follows that the services for the project had to be sourced or procured by the Namibia Airports Company, in accordance with the Airports Company Act, 1998, and the Namibia Airports Company’s procurement procedures. I therefore reject the argument by Mr Schlettwein that the contract for the project was for the procurement of goods and services on behalf of the Government.”
This comes as local weekly, Confidente, reported this week that the old Namibia Airports Company (NAC) board dismissed a bid by a Turkish company to refurbish and upgrade Hosea Kutako International Airport for N$3 billion, which is way less than the N$7 billion that Anhui Foreign Economic Construction had charged for the same work.


The Windhoek Observer is an English-language weekly newspaper, published in Namibia by Paragon Investment Holding. It is the country's oldest and largest circulating weekly.

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