Wilderness into the wild … whither Air Botswana?

18 Jun 2017

The Botswana Telecommunication Corporation Limited (BTCL) does not provide a guide to the eventual privatisation of Air Botswana which leaves the national airline’s transfer of ownership from government to the private market a process yet to be fully revealed. 

SUNDAY STANDARD’s TLOTLO LEMMENYANE questions whether the absence of a guide is a contributing factor to the widespread perception that Air Botswana is not following the prescribed privatisation path? 

On Tuesday last week at the Ministry of Transport and Communication quarterly press briefing, Minister Kitso Mokaila ventured into explaining the events that unfolded between the a). Floatation of an Expression of Interest (EOI) in February to rescue the ailing national airline and b). the resultant decision made four months later indicated by the CAB 12(A)/2017 Presidential Directive specifying the conversion of Air Botswana into a private company that will partner with government whose majority shareholding was to be held by Wilderness Holding, a regional tourist outfit with founding roots in Botswana. 

How the decision was reached 

According to Mokaila, the decision to partner with Wilderness was not an instruction from the President but was rather taken by the Ministry following a presentation to the Executive for approval. 

He berated the media for misleading the public regarding the decision suggesting that the reports prematurely cut the discussions that were to follow. Mokaila said that the involvement of Wilderness Holdings was still at a recommendation stage and that its selection was based on the model it had proposed. 

The model, he said, was consistent with the business plan that was compiled by Air Botswana in partnership with International Air Transport Association (IATA) which provided a guide on the direction the airline should take.  

Wilderness Holding was in the race with Comair as the two selected companies from the initial 17 that had shown interest. 

Wilderness acts contrary to decision  

Mokaila addressed the issues against the backdrop of the decision by Wilderness Holdings to withdraw its EOI at the heat of backlash on its selection. 

He believes that Wilderness withdrew its EOI so as to protect its brand amid the media reports. The Permanent Secretary to the Transport Ministry Kabelo Ebineng added that the company’s move could be attributed to the fact that as a public company news that surround it can affect its share price movements.                       

Conflict of interest by the President?

Mokaila opposed the view that the decision had a conflict of interest relating to the President asserting that contrary to popular belief the President does not have ownership stake in Wilderness Holdings. 

The President, he said, owns a 5 percent stake in Linyanti Investments, a subsidiary to Wilderness Holding that currently owns the Linyanti concession. The Linyanti Concession covers 1 250km2 of the northern Kalahari in the Chobe District. This makes it the second biggest size of concession after Khwai and Abu at 1 800km2 respectively from the 10 concessions that Wilderness Holdings currently controls. Mokaila stressed that the President’s interest was at a concessionary level which he said was insignificant to cause conflict of interest.  

Aviation Experience 

In addition to its luxury safari camp business Wilderness Holdings also runs a charter business which according to its 2016 annual report has a total of 33 aircraft and leases a further five. 

On whether Wilderness Holding possessed the requisite experience to take control of a national airline which plays in a globally cut-throat aviation market Mokaila said that the issue of aviation experience was yet to be discussed. He added that the process had not reached the stage where his Ministry could determine if Wilderness Holding’s model was going to work, saying that had further talks continued such information was going to be established. 

Where was PEEPA?  

According to Ebineng, the start of the EOI process leading to the decision to partner with Wilderness Holdings did not involve the Public Enterprise Evaluation and Privatisation Agency (PEEPA). PEEPA was established by government to use its authority, resources and technical skills to oversee all aspects of privatisation on behalf of government. 

Ebineng said that PEEPA could not be involved at that stage as no decision had taken place. He added that following the decision to partner with Wilderness Holdings, PEEPA was duly informed and asked to take the talks forward. He refuted the view that PEEPA had been left in the lurch.   

Way Forward  

Mokaila confidently expressed that his Ministry would forge ahead with other options saying that the withdrawal of Wilderness Holdings will not derail the plan. He did not disclose specific details on what the other options are and also did not give a timeline to the process.   

Privatisation as a subject is characterised by a long winding track record in Botswana but its realisation is only limited to the epochal listing of BTCL in the Botswana Stock Exchange (BSE). This restricts comparison of the turn of events relating to the pending privatisation of Air Botswana to earlier cases.