Attempts by the AdoAir aviation company to validate the controversial contract it was awarded to lease two luxury jets to the presidency have been vigorously opposed by Minister of Defence Nosiviwe Mapisa-Nqakula.
She claims in court papers that the contract is “invalid and unenforceable” and contravenes the Public Finance Management Act.
Mapisa-Nqakula, the sole defendant, responded last week to a summons lodged in the North Gauteng High Court in Pretoria by AdoAir that she either validate the R830-million contract, or pay damages of more than R200-million.
In the event that the court found that the parties had concluded a written agreement, the minister listed a number of reasons why she considered the agreement invalid and unenforceable, including that it had not complied with treasury regulations, which require any deviation from an open tender to be authorised.
The departmental commercial procurement board had also not approved a closed bid or one not advertised.
Mapisa-Nqakula said the citizenship of the shareholders and personnel raised concerns, pointing out that the shareholders named in the bid document differed substantially from the current shareholders.
“The shareholders disclosed were incomplete and therefore misleading and no share certificates were contained in the bid documents.”
Adegboyega Olulade, a Nigerian businessperson, is the current chairperson and director of AdoAir, which is based at Lanseria Airport near Johannesburg.
No certificates of compliance by subcontractors were included in the bid, Mapisa-Nqakula stated, and AdoAir did not have the aircraft available at the time of the bid.
AdoAir claimed in court papers that the two transport aircraft for very, very important persons would be selected by the minister from a selection available.
The choice would have been either two Embraer Lineage 1000 aircraft, two Global Express XRS aircraft, one Global Express XRS and one Embraer Lineage 1000, or one Dassault Falcon 7X and either one Global Express XRS or one Embraer Lineage 1000.
“The plaintiff would obtain finance to procure the aircraft to be leased to the defendant and any reasonable conditions required by the plaintiff’s financier to be included as terms of the lease agreement would form part of the lease agreement,” AdoAir claimed.
In Sisulu’s sights
The contract came under fire during the tenure of Mapisa-Nqakula’s predecessor, Lindiwe Sisulu, who was moved by President Jacob Zuma in a Cabinet reshuffle to become the minister of public service and administration.
But, while a court case was going on in May this year between her department and AdoAir, Sisulu told her legal team to try to resolve the compliance issues of the contract through negotiation.
Mapisa-Nqakula cited several reasons why she felt the contract did not meet the legal requirements.
“The invitations to tender, the bid and the acceptance of the bid were in contravention of section 39(1) of the Public Finance Management Act, as they would constitute unauthorised expenditure,” she said.
The secretary of defence, Mpumi Mpofu, refused to sign the AdoAir contract last year, acting on the advice of her legal advisers. She later resigned in protest.
Mapisa-Nqakula revealed that the contract was eventually signed by Lieutenant Colonel Mahlage Nape, who, the Mail & Guardian was informed, is second in command in the procurement division.
Glynnis Underhill is the M&G‘s Cape Town correspondent. Nelly Shamase is a member of the M&G Centre for Investigative Journalism (amaBhungane).