This is a true story.
Nico Czypionka dozed off during an economic briefing and drifted into dreamland. He found himself in a conference room with Nelson Mandela, former South African President. In the dream Mandela had just appointed his Cabinet but was turning to Czypionka for advice.
Czypionka has plodded down a decidedly long and winding road since writing about his famous dream in the Financial Mail edition of 2004. There have been many hats to wear in his illustrious career: Czypionka the Standard Bank Chief Economist, Czypionka the Head of Societe Generale Consultancy, Czypionka the Chief Executive of Economic Dynamics, Czypionka the head of the Business and Economic Advisory Council (BEAC), Czypionka the Air Botswana Privatization model blue print author, Czypionka the Air Botswana Privatization Evaluation Committee member, Czypionka the Air Botswana Privatization Committee reference Committee Member, Czypionka the Air Botswana Privatization chief negotiator.
These days, it is neither his foray into the business world nor his illustrious career as an economist that puts him on the spot. It is rather his alleged dream to have the ears of the most influential heads in the country and his many conflicting roles in the privatization of Air Botswana. According to sources close to the Air Botswana privatization, when Czypionka got involved with the national airline a questionable side to the respected economist emerged.
His detractors at the government enclave ÔÇô and there are many of them ÔÇô resent him as an unwelcome influence who seeks to be the power behind the throne, the puppet master who pulls the strings of officials in key places.
Czypionka is the central figure in what could become the biggest privatization scandal in Botswana. A reconstruction of his role in the privatization of Air Botswana portrays him as an ingenious deal maker who thought nothing of trampling the norms of doing business at the government enclave.
For example, while Cabinet and Parliament were poring over the 2003 Air Botswana Transition Act which provided for the registration of the national airline as a public company to be privatized as a going concern, Czypionka had other ideas. He wanted Air Botswana to be liquidated and the proceeds used to buy shares in SA Airlink, a family owned airliner in South Africa.
In a paper he co-authored with SA Airlink CEO Roger Foster that he presented to Cabinet in April 2006 he proposed that the process should be speeded up so that it is concluded by September 2006. “This date would not only symbolically coincide with Botswana’s 40th anniversary of independence, but it would also facilitate adequate planning and change of management. The commencement of this arrangement would then also coincide with the start of SA Airlink’s financial year.”
The result of Czypionka’s advice was a statement by the Minister of Transport, Lesego Motsumi a few weeks later announcing the accelerated privatization of Air Botswana and a number of international airlines were invited to submit bids.
“It was always push, push, push, pressure, pressure, pressure” a source close to the Air Botswana privatization process says. “He is someone who is very aggressive and on the edge, who sadly has the Vice President’s complete trust.”
All things seemed possible. Czypionka’s brash style often clashed with the conservative culture of the government enclave, but a few key officials were drawn to his moxie and friendship with the Vice President.
In fact, whenever Czypionka starts putting pressure to speed up the Air Botswana privatization process, you can be sure Vice President Ian Khama is not very far off. Czypionka pushed for the Privatization Policy to be turned into a legal instrument, with the government privatization Agency, PEEPA enjoying full statutory powers.
The Ministry of Finance, led by Permanent Secretary, Serwalo Tumelo, however, wanted PEEPA to remain an advisory body.
Khama stepped into the fray on Czypionka’s side. He instructed the Ministry of Finance to start a process rolling that would lead to the redraughting of the Privatization Policy.
The South African Financial Mail reported that Czypionka “has resurfaced in Botswana as director of Business and Economic Advisory Council- a body set up by President Festus Mogae to explore the economic repositioning of Botswana. He is rumoured to be close to Ian Khama, Botswana’s president ÔÇô in-waiting, who is said to have secured Czypionka’s invitation to the country to sit on this august committee.”
To most Czypionka watchers, it thus did not come as a surprise when the ultra-hard right wing economist who had presented an unsolicited bid to Cabinet on behalf of SA Airlink was drafted into the Air Botswana Privatization Evaluation Committee giving him a free hand to influence the bidding process.
Reputable international airlines which had shown an interest in buying Air Botswana as envisaged by the Air Botswana Transition Act of 2003 pulled out of the privatization process and did not submit their bids because they allegedly felt that the process was stage managed and they were only called in to make up the numbers and legitimize the SA Airlink deal.
Among international airlines that withdrew their bids from the Air Botswana privatization were Ethiopian Airlines, Comair Ltd, a reputable South African courier, British Airways, ExecuJet Aviation Group, A Zurich Based air Charter Company, Inter Air South Africa and the Tourism Empowerment Group.
The Sunday Standard can further reveal that the airlines that were invited to bid for Air Botswana privatization had already been disqualified by Czypionka in the paper he had presented to Cabinet and were apparently invited to bid only to make up the numbers and legitimize the SA Airlink deal.
The “Concept paper for a Strategic Equity Partnership with the regional airline Airlink” penned by Czypionka and SA Airlink CEO Roger Foster which has become a blueprint for the Air Botswana privatization, argues among other things that “having analyzed all regional airline operations, only Airlink fulfils ….the requirements- others fail mainly on the criteria of suitable aircraft and networks ÔÇô or they are existing competitors. A marginal candidate would be British Airways/ Comair/Kulula, but this group operates only large jet aircraft, which are unsuitable for Botswana’s current requirements.”
In his concept paper campaigning that the strategic partnership between Air Botswana and SA Airlink should be speeded up, Czypionka argues that the national carrier is on its last legs and that “even with significant capital injection, Air Botswana will probably be badly hurt by open competition.”
It was about the same time that the Botswana Guardian quoted a source from PEEPA saying Air Botswana was expected to continue making losses.
With the scare stories that Air Botswana was on the brink of collapse wantonly fed to the media, local newspapers went on a feeding frenzy, zeroing in on the airline’s red balance sheet. The media was sold on to the notion that the ailing airline needed recapitalization of at least P300 million. The Botswana Guardian went as far as to conclude that, “Government which recently ordered a multimillion Pula presidential jet is in no mood to bail out AB and is in a rush to sell. AB’s poor balance sheet makes it easy pickings for competition, some of whom may wish to buy and close it down. If things were to go according to plan, Air Botswana would be sold within the next two months. This fitted in with Cypionka’s conclusion and the argument by Air Botswana General Manager, Lance Brogden.
Air Botswana staff members, however, argued that Czypionka, Air Botswana Chef Executive Lance Brogden and the anonymous PEEPA source, who were pushing for the speedy privatization of Air Botswana, had created a burning platform from which they had launched their campaign.
There was, however, a small problem; Czypionka’s chief ally at the government privatization agency, PEEPA Chief Executive Officer, Joshua Galeforolwe, was on slippery ground. The PEEPA board wanted to open Galeforolwe’s job up for competition and had already advertised it. BEAC, led by Czypionka, on the other hand was pushing for the automatic renewal of Galeforolwe’s contract.
Khama intervened on Czypionka’s side again and instructed PEEPA to reappoint Galeforolwe whose job had already been advertised. This resulted in a standoff between Cabinet and the PEEPA board. Galeforolwe was, however, eventually reappointed and the PEEPA board neutralized with additional members believed to be friendlier to the speedy privatization campaign of Air Botswana.
The accelerated privatization of Air Botswana was, however, also facing internal resistance. It is understood that staff members voicing dissent to the airline’s accelerated privatization were systematically purged. Air Botswana’s Board Chairman and Permanent Secretary in the Ministry of Transport, Mr. G.N Thipe, was dropped under mysterious circumstances. There were speculations that his ouster was linked to his position on the speedy privatization of Air Botswana.
Thipe had started asking pointed and difficult questions at Board meetings.
The Airline’s company secretary and General Counsel, Tebogo Moipolai, who had allegedly raised concern about the goings on at Air Botswana, was closed out of board meetings and accused of sabotaging the privatization process.
With all opposition flattened, government chose SA Airlink as the preferred partner as recommended by Czypionka who was again drafted into the negotiating team. This provided fodder for conspiracy theorists at the government enclave and parliament who sensed shadiness and speculated that “a certain officer at the Office of the President, and some PEEPA and Air Botswana officials had conspired with SA Airlink to plunder Air Botswana.”
As a result, a few weeks ago, parliament passed a motion, stopping the Air Botswana privatization.
MPs were unhappy that the privatization model proposed by Czypionka and the SA Airlink CEO violated the privatization policy of 2000.
Czypionka, however, went on air insisting that the parliament motion could not stop negotiations with SA Airlink because the motion was not binding on Cabinet. Parliament’s motion was a request to cabinet, he said. The position was supported by the Minister of Transport, Lesego Motsumi, and PEEPA chief executive, Joshua Galeforolwe, who sought the board’s approval to imitate a campaign that would put a pretty face to Cabinet’s rejection of the parliament motion. Galeforolwe set in motion his antics by way of drafting a press release that effectively amounted to a cynical media manipulation to divert attention while Air Botswana privatization was speeded up.
It was about the same time that the Botswana Guardian quoted a source from PEEPA saying Air Botswana was expected to continue making losses. With the scare stories that Air Botswana was on the brink of collapse wantonly fed to the media, local newspapers went on a feeding frenzy, zeroing in on the airline’s red balance sheet. The media was sold on to the notion that the ailing airline needed recapitalization of at least P300 million. The Botswana Guardian went as far as to conclude that, “Government which recently ordered a multimillion Pula presidential jet is in no mood to bail out AB and is in a rush to sell. AB’s poor balance sheet makes it easy pickings for competition, some of whom may wish to buy and close it down. If things were to go according to plan, Air Botswana would be sold within the next two months. This fitted in with Cypionka’s conclusion and the argument by Air Botswana General Manager, Lance Brogden.
Air Botswana staff members, however, argued that Czypionka, Air Botswana Chef Executive Lance Brogden and the anonymous PEEPA source, who were pushing for the speedy privatization of Air Botswana, had created a burning platform from which they had launched their campaign.
There was, however, a small problem; Czypionka’s chief ally at the government privatization agency, PEEPA Chief Executive Officer, Joshua Galeforolwe, was on slippery ground. The PEEPA board wanted to open Galeforolwe’s job up for competition and had already advertised it. BEAC, led by Czypionka, on the other hand was pushing for the automatic renewal of Galeforolwe’s contract.
Khama intervened on Czypionka’s side again and instructed PEEPA to reappoint Galeforolwe whose job had already been advertised. This resulted in a standoff between Cabinet and the PEEPA board. Galeforolwe was, however, eventually reappointed and the PEEPA board neutralized with additional members believed to be friendlier to the speedy privatization campaign of Air Botswana.
The accelerated privatization of Air Botswana was, however, also facing internal resistance. It is understood that staff members voicing dissent to the airline’s accelerated privatization were systematically purged. Air Botswana’s Board Chairman and Permanent Secretary in the Ministry of Transport, Mr. G.N Thipe, was dropped under mysterious circumstances. There were speculations that his ouster was linked to his position on the speedy privatization of Air Botswana.
Thipe had started asking pointed and difficult questions at Board meetings.
The Airline’s company secretary and General Counsel, Tebogo Moipolai, who had allegedly raised concern about the goings on at Air Botswana, was closed out of board meetings and accused of sabotaging the privatization process.
With all opposition flattened, government chose SA Airlink as the preferred partner as recommended by Czypionka who was again drafted into the negotiating team. This provided fodder for conspiracy theorists at the government enclave and parliament who sensed shadiness and speculated that “a certain officer at the Office of the President, and some PEEPA and Air Botswana officials had conspired with SA Airlink to plunder Air Botswana.”
As a result, a few weeks ago, parliament passed a motion, stopping the Air Botswana privatization.
MPs were unhappy that the privatization model proposed by Czypionka and the SA Airlink CEO violated the privatization policy of 2000.
Czypionka, however, went on air insisting that the parliament motion could not stop negotiations with SA Airlink because the motion was not binding on Cabinet. Parliament’s motion was a request to cabinet, he said. The position was supported by the Minister of Transport, Lesego Motsumi, and PEEPA chief executive, Joshua Galeforolwe, who sought the board’s approval to imitate a campaign that would put a pretty face to Cabinet’s rejection of the parliament motion. Galeforolwe set in motion his antics by way of drafting a press release that effectively amounted to a cynical media manipulation to divert attention while Air Botswana privatization was speeded up.
