Thursday, April 9, 2020

Comair may oust SA Airlink in Air Botswana deal

British Airways/Comair seems set to oust SA Airlink as the strategic equity partner in the controversial privatization of Air Botswana.

BA/Comair, which decided last year not to bid for a stake in air Botswana allegedly because they felt the process was being stage managed to favour SA Airlink, recently asked the government if the bidding process could be reopened, but were told it was too late.

This was confirmed by the Works and Transport minister, Lesego Motsumi, who told The Sunday Standard that “right now we are only negotiating with SA Airlink.”

Although Airlink announced last week that it was going ahead with preparations to become the Air Botswana strategic partner there is already talk that Cabinet may reject Minister Motsumi’s recommendation for a partnership with Airlink and start negotiations with BA/Comair.

While the Airlink chief executive officer, Rodger Foster, admitted in an interview with the South African media that their deal with Air Botswana could be derailed for political reasons following objections by the parliament backbench, BA/Comair chief executive officer, Gidon Novic, was hopeful, saying that they are “monitoring the situation” in view of the objection to Airlink and the possibility that the deal might fall through. “We have got a dedicated team working permanently on opportunities to expand our African services. They are in contact with various people in African states,” he was quoted saying.

A source inside Cabinet told The Sunday Standard that Cabinet had not yet committed itself to the Airlink deal and was likely to reject minister Motsumi’s recommendations.

The cabinet stand is believed to be a result of the national backlash against the Airlink deal following reports suggesting impropriety in the way the bidding process was conducted, and reports questioning the financial standing of Airlink, which is also understood not to be IATA recognized. Two South African financial institutions, Nedbank and Coronation Fund Management have controlling shares in Airlink following the conversion of loans into equity after the airline failed to service its loans.

The Sunday Standard earlier this year revealed that Nico Czypionka convinced the Botswana government to go into a strategic partnership with Airlink as far back as April 2006 and other interested airlines were only invited to submit bids for the privatization of Air Botswana weeks later, apparently to create a false impression that there was fair and competitive bidding.

The Sunday Standard further revealed that SA Airlink CEO, Roger Foster and Czypionka co-wrote the blueprint for Air Botswana privatization which is being used by the Botswana negotiation team in their negotiations with the South African airline although it goes against the Air Botswana Privatization Policy of 2003.

Investigations turned up documents prepared by Czypionka, then Director of the Business and Economic Advisory Committee (BEAC) Task Force, in collaboration with Roger Foster, CEO of SA Airlink, dated April 2, 2006 which were an unsolicited bid for a strategic partnership between SA Airlink and the government of Botswana.

Immediately after Czypionka had presented the SA Airlink unsolicited bid to Cabinet, the Minister of Works and Transport, Lesego Motsumi, announced the accelerated privatization of Air Botswana and a number of reputable international airlines were invited to submit tenders.

Czypionka, who had already won the government over to the SA Airlink deal, was drafted into the Air Botswana privatization Tender Evaluation Committee and the Air Botswana Privatization Reference Committee giving him a free hand to influence the bidding process.

Other reputable international airlines like BA/Comair, which had shown interest in buying Air Botswana as envisaged by the Air Botswana Transition Act of 2003, however, pulled out of the privatization process and did not submit their bids because they allegedly felt that the process was stage managed and was stage managed and they were only called in to make up the numbers and legitimize the SA Airlink deal.

Results of the negotiations between government and Airlink are still to be presented to Parliament which has already expressed its objection. Should parliament reject the deal, government would be forced to open negotiations with BA/Comair.

Cabinet is also said to be unhappy with the Airlink deal and is widely expected to reject it and propose negotiations with BA/Comair.

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