Battle for Ondangwa Airport tender
An application to have a Namibia Airports Company board decision overturned, finds itself defended by the Chinese contractor appointed to upgrade the Ondangwa Airport's runway.
The main contractors for the construction of the Ondangwa Airport runway rehabilitation phase 2 are opposing the application of the Namibia Airports Company (NAC) to have the decision to appoint them overturned. The NAC has brought an application to the High Court to reverse the decisions and resolutions of the previous board of directors of the applicant to appoint them as main contractors to be reviewed and set aside. The previous board allegedly disregarded the procurement policies of the NAC.
The China State Construction Engineering Corporation, in papers submitted to court during case management, argued that the NAC failed to make out a case for irregularities in the awarding of the tender by the previous board. “The previous board was authorised to and acted within its powers to authorise the Chinese Construction Engineering Corporation to continue with phase 2 of the tender,” the Chinese company stated.
The previous NAC board on 23 June 2016 awarded the tender to the Chinese company for the rehabilitation of Ondangwa Airport's runway under phase 2.
According to the Chinese company, in the circumstances of the present case, it would be enough for the court only to make a declaration without setting the award aside and that would be enough to redress the complaints alleged by NAC.
The NAC in its application wants the court to declare the contract between the two parties invalid and set it aside, and order the Chinese to pay for the costs of the application. The respondents alleged the NAC launched the application to review and set aside its decision on 7 December 2017, 17 months after the decisions and resolutions were made.
“The delay is extraordinarily long and a substantial part thereof remains unexplained, and, its effect is prejudicial to the respondents,” the Chinese company alleged.
The works ministry further did not instruct the NAC not to proceed with the project which was already awarded, and in addition, board minutes dated 10 March 2017 stated they had N$240 million in the capital budget and that the money is sufficient to execute the project.
“The board did not raise the alleged lack of funds with the respondents. The respondents acted in good faith and genuinely believed that the NAC had or would raise sufficient funds,” Zhou Xihua general manager and director of the China State and Construction Engineering Corporation said.
Xihua, in sworn statement submitted on 3 April 2018, requested that the application be dismissed with costs. He stated that if the court were to find there were some irregularities or non-compliance with NAC's procurement policy that in the circumstance of the case it would be enough only to make a declaration without setting the order award aside.
According to him it was clear as from January 2017 that the applicant asserted the existence of “procedural and substantive defects” in the award of phase 2 of the tender and that there was no need for them to wait further, and, that the applicant should not have to undertake massive detailed forensic reports as the basis to institute this application. Forensics had allegedly no terms of reference to disclose the nature and extent of the investigation in order to determine the reasonableness of the delay to institute the application.
“They did not disclose the summary of the outcome of the forensic investigation or the conclusions of the report to the court,” he alleges.
He stated they proceeded to implement the tender upon acceptance of the award on 29 June 2016. They further submitted a performance guarantee of N$20 million to the NAC as required by the contract.
Xihua alleges that since August 2016 to date of the institution of the proceedings in December, they incurred total running costs in respect of the outstanding time of more than N$66 million.
“The court must take into account the prejudice that would result were the contract between NAC and us be set aside. We will suffer severe financial prejudice if the steps taken in the implementation of the award are undone,” he submitted.
According to him, the travelling public, the aviation directorate, and the works ministry itself will suffer severe prejudice because of the inevitable delay in providing them with a modern category four airport and the fact that they will continue utilise a dilapidated runway at Ondangwa Airport.
“The delay to bring the application for review is unreasonable, inordinate and egregious and the court should refuse to grant it,” Xihua argued in his papers.
FRED GOEIEMAN
The China State Construction Engineering Corporation, in papers submitted to court during case management, argued that the NAC failed to make out a case for irregularities in the awarding of the tender by the previous board. “The previous board was authorised to and acted within its powers to authorise the Chinese Construction Engineering Corporation to continue with phase 2 of the tender,” the Chinese company stated.
The previous NAC board on 23 June 2016 awarded the tender to the Chinese company for the rehabilitation of Ondangwa Airport's runway under phase 2.
According to the Chinese company, in the circumstances of the present case, it would be enough for the court only to make a declaration without setting the award aside and that would be enough to redress the complaints alleged by NAC.
The NAC in its application wants the court to declare the contract between the two parties invalid and set it aside, and order the Chinese to pay for the costs of the application. The respondents alleged the NAC launched the application to review and set aside its decision on 7 December 2017, 17 months after the decisions and resolutions were made.
“The delay is extraordinarily long and a substantial part thereof remains unexplained, and, its effect is prejudicial to the respondents,” the Chinese company alleged.
The works ministry further did not instruct the NAC not to proceed with the project which was already awarded, and in addition, board minutes dated 10 March 2017 stated they had N$240 million in the capital budget and that the money is sufficient to execute the project.
“The board did not raise the alleged lack of funds with the respondents. The respondents acted in good faith and genuinely believed that the NAC had or would raise sufficient funds,” Zhou Xihua general manager and director of the China State and Construction Engineering Corporation said.
Xihua, in sworn statement submitted on 3 April 2018, requested that the application be dismissed with costs. He stated that if the court were to find there were some irregularities or non-compliance with NAC's procurement policy that in the circumstance of the case it would be enough only to make a declaration without setting the order award aside.
According to him it was clear as from January 2017 that the applicant asserted the existence of “procedural and substantive defects” in the award of phase 2 of the tender and that there was no need for them to wait further, and, that the applicant should not have to undertake massive detailed forensic reports as the basis to institute this application. Forensics had allegedly no terms of reference to disclose the nature and extent of the investigation in order to determine the reasonableness of the delay to institute the application.
“They did not disclose the summary of the outcome of the forensic investigation or the conclusions of the report to the court,” he alleges.
He stated they proceeded to implement the tender upon acceptance of the award on 29 June 2016. They further submitted a performance guarantee of N$20 million to the NAC as required by the contract.
Xihua alleges that since August 2016 to date of the institution of the proceedings in December, they incurred total running costs in respect of the outstanding time of more than N$66 million.
“The court must take into account the prejudice that would result were the contract between NAC and us be set aside. We will suffer severe financial prejudice if the steps taken in the implementation of the award are undone,” he submitted.
According to him, the travelling public, the aviation directorate, and the works ministry itself will suffer severe prejudice because of the inevitable delay in providing them with a modern category four airport and the fact that they will continue utilise a dilapidated runway at Ondangwa Airport.
“The delay to bring the application for review is unreasonable, inordinate and egregious and the court should refuse to grant it,” Xihua argued in his papers.
FRED GOEIEMAN
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