Monday, June 1, 2020

Engineering firm slaps CAAB with P1.4bn lawsuit

BY PORTIA NKANI

The Civil Aviation Authority Botswana (CAAB) has been slapped with a lawsuit by an investor who is demanding more than P1.4 billion following an alleged breach of lease agreement.

A citizen owned company Lesedi Consulting Engineers has dragged the Authority before Lobatse High court demanding compensation for failing to honour the lease agreement contract for a piece of land  near Sir Seretse Khama Airport.

According to papers before court, the lease was signed in 23rdJuly 2008 between Lesedi Consulting Engineers and the Department of Lands and commenced in August 2008. This was before the inception of the CAAB.  Lesedi Consulting Engineers as the lessee was expected to construct a “boutique hotel and a club.”

The said lease agreement was to endure for a period of 25 years subject to renewal. The initial rent payable by Lesedi Consulting Engineers to government was a sum of P52, 818.00 per annum

In terms of the lease agreement, upon the establishment of the Civil Aviation Authority and it becoming fully operational was to cease being the lessor and CAAB was to become the new lessor.  On 7th October 2011, CAAB was established and thereby became the lessor as provided for in the lease agreement between Lesedi Consulting Engineers and the government. It emerges from the papers that since the lease agreement was signed in 2008, the government has allegedly not allowed the company to use the land for constructing the boutique hotel and a club at Sir Seretse Khama International Airport.

Lesedi Consulting Engineers, through its lawyers, Ramalepa Attorneys has now approached the High Court accusing CAAB and the government of breaching the lease agreement. The company states that the government and CAAB respectively failed to deliver vacant and beneficial possession of the land the subject of the lease agreement to it from the date of commencement of the lease agreement(2008)  until 16th October 2018.

“As a result of the third (government) and first defendant (CAAB)’s delay in the delivery of beneficial possession of the land, the subject of the lease agreement to the plaintiff (Lesedi Consulting Engineers), the plaintiff has suffered damages associated with and arising from such delays; loss of profit which would have been earned from the operations of the hotel and conferencing facility business in the sum of P1.4billion,” the company’s lawyers said.

They added that “furthermore are the damages suffered as a result of the increase in costs of construction of the boutique hotel and conferencing facility in the sum of P332.6million being the difference between the costs of construction in 2008 and the costs of construction in 2018.” 

The lawyers said that CAAB and government are liable to pay company the sum of P1.4billion as damages for loss of profit and the sum of P332.6million as damages for the escalation of costs of construction, both which were incurred during the period of the delay occasioned by the breach of lease agreement, interest thereon at the rate of 10 percent per annum from the date of default to the date of full and final payment and costs of suit.

Notwithstanding the lawful and consistent demand, the first and second defendants are said to have refused to make payments to the plaintiff of the said damages.

According to court records, the then chief executive officer of CAAB, Geoffrey Mashabesha, when responding to a letter from the company’s lawyers, explained that upon its inception in 2009, the CAAB assumed, among others the assets, responsibilities, rights and obligations which prior to its coming into existence, vested in fell under the erstwhile Department of Civil Aviation.

The taking of the rights and obligations he said included among others, the Lease Agreement signed on July 23rd 2008 between the government and Lesedi Consulting Engineers pertaining to a piece of land located within the Sir Seretse Khama International Airport  measuring 17 606 square meters.

Mashabesha admitted that indeed over the years the two parties have been engaging over the issues; amongst them being tenure of the lease, plot size, possible sub division and rationalization of the plot coordinates and suspension of the lease agreement due to the development of a Land Use Master Plan for Sir Seretse Khama International Airport.

He further wrote, “even though the leased land was at some point in time handed to your client and your client given the go-ahead to proceed with developments, your client was unable to do so for reasons which are not attributable to CAAB.”

He added that “It should further be noted that, during the period since CAAB inception, your client has been well aware of and accepted the reasons for the delay in proceeding with developments within the SSKIA. In recognition of the validity of the said reasons, your client mutually acquiesced to the suspension of rental payments for the plot which by letter dated 8th October 2013 CAAB advised was for the period 2009 until further notice.”

The case will be heard in November this year.

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