Continued bungling in finalizing a settlement agreement with private aviation firm, Expedite Aviation, which is seeking to recover N$90 million it spent in a botched joint venture agreement with the Tsumeb Municipality, could end up costing the State N$110 million.
The company recently pleaded with Prime Minister, Saara Kugongelwa-Amadhila, to intervene in the case, which has also dragged in former Tsumeb Mayor, and now Deputy Minister of Information and Communication Technology Engel Nawatiseb, former Minister of Works and Transport, Erkki Nghimtina and former Attorney General and now Minister of Justice, Sackeus Shangala, who were all party to the agreement.
In a letter seen by the Windhoek Observer, Expedite Aviation owner, Rainier Arangies, wrote to Kugongelwa-Amadhila in February warning her that government could become liable for over N$110 million in compensation to the aviation firm including legal fees, if it continues to drag its feet in settling the dispute.
According to the aviation company, it invested N$90 million when it assumed management rights for the Tsumeb Airport eight years ago.
“There is no dispute about the fact that the validity of the agreement was at all times recognised by the municipality and the government, as well as in a letter of the AG, Mr Shanghala.
“Acting upon the good faith of the parties involved in the conclusion of the government, Expedite invested more than N$90 million in the airport in the approximately eight years subsequent to the conclusion of the partnership agreement,” Arangies said.
“As regards to the quantum of claim, Dr Horak, who was engaged by the municipality to do an assessment of the validity of the claims of Expediate, confirmed the bulk thereof as being fair and reasonable. He also confirmed the extent of the investment of Expedite in relation to operational costs over a period of 6,5 years.”
In 2009, the municipality and the aviation company entered into a 50-year agreement, through a public private partnership (PPP), where the two parties were to jointly upgrade and run the Tsumeb Airport and facilitate a helicopter training academy.
The matter became contested after the Tsumeb Municipality sought a legal opinion from the AG’s office seeking to terminate the agreement.
Shanghala is said to have recommended termination after which the Ministry of Works and Transport sought authority from Cabinet during 2017 to compensate Expedite with N$20 million for its investment in the airport.
The works ministry also wanted to pay a monthly administration fee of N$450,000 until the final date of settlement of all the disputes between the aviation company and the municipality.
The settlement was later withdrawn following advice from Tsumeb lawyers despite Cabinet having authorized the payment.
Permanent Secretary in the Ministry of Works and Transport, Willem Goeiemann, declined to shed more light on the matter when contacted by the Windhoek Observer.
“The matter is still going through negotiations. We can speak after it has been brought to Cabinet,” Goeieman said.
Attorney General, Albert Kawana, said he was in Omaheke and needed time to discuss the matter with the government attorney, Matti Asino.
Spokesperson in the Office of the Prime Minister, Saima Shaanika, said that she does not remember the letter.
“Have you spoken to Ministry of Works and Transport? Normally they are the one who deal with such issues. But I will check if it is there, maybe the prime minister has seen it,” Shaanika said.
Citing a source close to Tsumeb’s Chief Executive Officer, Alfeus Benjamin, the Windhoek Observer reported in January that Shanghala was considering paying N$40 million to the aviation company to prevent the case from going to court.
At the time, Shanghala through Deputy Government Attorney, Marius Boonzaier, denied discussions of a court settlement between the two parties.
The dispute is said to have resulted in the closure of the airport in July last year which has led to a prohibition on landing any aircraft, including emergency flights and those of Government Air Transport Services, which facilitates the flights of President Hage Geingob.
The airport, which has one runway around 1,470 metres long, is located east of the mining town.
Expedite Aviation took over the airport as a maintenance partner and has since upgraded the facility from a point of mere existence, into a certified port of entry which was duly registered and certified by the Namibia Civil Aviation Authority.
This is after Tsumeb Municipality failed to commit to its shared responsibilities in the renovation of the facility.