Namibia Airports Company: Another Air Namibia looming? (Part 2)

PLANE SPOTTER WRITES:

The NAC is forever in the news for the wrong reasons.

In July 2019 the new CEO of the Namibia Airports Company, Mr. Bisey /Uirab, (ex-Namport) announced that Hosea Kutako Airport was to undergo a N$250 million upgrade.

NAC apparently did not have the money to carry out the N$250 million upgrade, it only had N$95 million of its own. So, it turned to government (taxpayers) to provide the N$155 million shortfall.

You may think that there was nothing wrong with that but...

Shortly after Mr /Uirab took over the reigns at the NAC he addressed a parliamentary committee and in the course of his address he mentioned that Air Namibia owed NAC N$500 million plus. It seems this amount had escalated from N$200 million about 3 years earlier. This clearly showed that the NAC (perhaps under pressure from a Minister or ED?) had not been collecting landing fees and other airport charges from Air Namibia for a protracted time.

In October 2019 Air Namibia was stopped from operating from/into South African airports because it owed ACSA outstanding airport charges, so the government paid up to resolve the matter but our own NAC did not see the need to also demand payment of its account?

Not collecting outstanding debts is not only bad management that may ultimately lead to bankruptcy, but it also sabotages the ability of a company to carry out its maintenance, upgrades and future expansion. Worse, it also sabotages its credit rating for when it wants to raise finance from the private sector.

Alan Miltz said: “Revenue is Vanity, Profit is Sanity, but Cash is King”.

The Airports Company Act No 25 of 1998, which established the company very clearly states in Section 5:

Functions of Company and appointment of chief executive officer

5. (1) (a) not unduly discriminate against or among various users or categories of users of any Company aerodrome; (the above is just part of Section 5 and I have underlined (a).

Namibia also is a signatory of the Chicago Convention of 1944 and this Treaty states:

Article 15 Airport and similar charges

Any charges that may be imposed or permitted to be imposed by a contracting State for the use of such airports and air navigation facilities by the aircraft of any other contracting State shall not be higher,

a) As to aircraft not engaged in scheduled international air services, then those that would be paid by its national aircraft of the same class engaged in similar operations, and

b) As to aircraft engaged in scheduled international air services, then those that would be paid by its national aircraft engaged in similar international air services.

From the above it is clear that the NAC contravened Section 5 of its founding Act as well as Article 15 of the Chicago Convention by charging (and hopefully collecting) from other users of its airfields while only charging but not collecting from Air Namibia, its national airline.

Over the years, apart from the alleged theft, fraud and corruption at the NAC the Boards of Directors and Management have regularly been accused of being incompetent. Despite praises from the parastatal’s executives, economist Omu Kakujaha-Matundu said: “We need to isolate three effects, namely incompetence of the board and management; corruption and political interference.” Yet nothing has really been done about it.

The following is attributed to Chairman Leake Hangala in The Namibian (30-01-2020): “Hangala revealed that the NAC operations have been considered unstable and operating on unsound business practices. However, he gave an assurance that with the new board and new head, things are stabilising and the company would ensure improved financial systems to meet its operational expenditure within its operational income. He indicated that the company had faced prolonged challenges and had been exposed to around 30 court cases and legal risks, with some of them affecting its operations negatively.”

* Part 3 to follow - Editor