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Air Botswana on Re-Fleeting and Cash Flow problems

The national airline, Air Botswana has explained the process which unfolded relating to its Re-Fleeting exercise which saw the acquisition two ATR 72-600 aircrafts as well as Embraer Jet.

The process was set in motion by a President Directive CAB 6 (A)/2018 which then mandated the Ministry of Transport and Communications (MTC) to acquire two ATR 72-600 turbo props aircraft for Air Botswana on behalf of the Government at a cost of BWP 290 million. 
The Presidential Directive was following a recommendation from MTC/Air Botswana in pursuance of the IATA Turnaround Strategy/Business Plan.

The equipment recommendation was on the basis of competitive bidding process between 3 international aircraft manufacturers being ATR, Bombardier and Embraer.  The process was all times in compliance with the Corporation Procurement Processes, which are in line with Public Procurement and Asset Disposal Act, according to a communique airline.

The airline contends that the ATR offer was attractive as it included trade-in of the existing ATR trade models for a new generation ATR Turbo prop. Bombardier offered solutions for both the Turbo Prop and the Jet, being Q400 and CRJ900 respectively, whereas Embraer proposed solutions for the Jet (E-Jets series), which was deemed fit for purpose, and in line with the re-fleeting aspiration of the Corporation.  As a result of the options presented before airline, the choice was therefore ATR (Turbo Prop) and Embraer (Jets).

“The Re-fleeting (Fleet modernisation) Project was supported by IATA through various seconded consultants, which included Mr Robert Menzies, Mr Hanspeter Baserga and Mr Chris Hudson,” Air Botswana said in a statement. “Management received offers for a Jet from Oman Air for a E175, valued at US$18.5m, and was active in pursuit of the deal when a US based aircraft leasing company EIC, two 2010 EI70 model aircrafts on the market for a combined value of US$22m the Air Botswana board resolved to pursue the EIC offer subject to funds availability.”

“The private sector funding universe was approached to assist with the funding requirements for the purchase and owing to the reluctance of the Botswana based finance institutions, Air Botswana eventually settled for Investec Mauritius. Unfortunately, due to, among others, the funding disbursement timing, the finance agreement did come to fruition.”

“Government intervened and provided funding from the Public Service Debts Fund (PSDF) to fund the acquisition of the two Jets. The funding was, welcome, as it was, fell short of the total funds needed for the acquisition of the Jet. The funds were insufficient for Entry into Service, ferry costs, insurance, cabin and flight crew training. The deficits were funded the operational budget of the airline, placing the cash flow of the organisation under tremendous pressure, which it has not recovered from since. 

“The Jet was received in December 2018 from EIC, and only managed to be integrate into service in June 2019, following protracted licensing and operationalisation issues between Air Botswana and the regulator Civil Aviation Authority of Botswana (CAAB). “The period saw intense scheduling challenges, serious cash flow challenges arising from the funding of Jet acquisition and the shortfall between the ATR trade-in.

“The assurance to the Minister is that the Fleet Modernisation Process has always been in full compliance with the Procurement Procedures of the Airline, in compliance with Corporate Governance process, and we have engaged the media at all times. We have offered the journalists full access to our records, an opportunity he declined.

We have reasonable that the tirade against the Corporation is in part supported and fuelled by a former Director of Engineering and Maintenance. The severance of the agreement with the director in part relates to Fleet Modernisation Project.  “We assure the Minister of our intention to cooperate fully with any aspects of the inquiries, and specifically to capacitate the Ministry with any clarification to deal with any inquiries.”

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DPP halts JSC, Judge’s back to work plan

25th January 2021

The Directorate of Public Prosecutions (DPP)’s decision to reject and appeal the High Court’s verdict on a case involving High Court Judge, Dr Zein Kebonang has frustrated the Judicial Service Commission (JSC) and Judge Kebonang’s back to work discussions.

JSC and Kebonang have been in constant discussions over the latter’s return to work following a ruling by a High Court panel of judges clearing him of any wrong doing in the National Petroleum Fund criminal case filed by the DPP. However the finalization of the matter has been hanged on whether the DPP will appeal the matter or not – the prosecution body has since appealed.

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BDP rejects Saleshando payment proposal

25th January 2021
MP saleshando

Botswana Democratic Party (BDP) top brass has declined a request by Umbrella for Democratic Change (UDC) to negotiate the legal fees occasioned by 2019 general elections petition in which the latter disputed in court the outcome of the elections.

This publication is made aware that UDC Vice President Dumelang Saleshando was left with an egg on his face after the BDP big wigs, comprising of party Chairman Slumber Tsogwane and Secretary General Mpho Balopi rejected his plea.

“He was told that this is a legal matter and therefore their (UDC) lawyer should engage ours (BDP) for negotiations because it is way far from our jurisdiction,” BDP Head of Communications, Kagelelo Kentse, told this publication.

This spelt doom for the main opposition party and Saleshando who seems not to have confidence and that the UDC lawyers have the dexterity to negotiate these kind of matters. It is not clear whether Saleshando requested UDC lawyer Boingotlo Toteng to sit at the table with Bogopa Manewe, Tobedza and Co, who are representing the BDP to strike a deal as per the BDP top echelons suggested.

“From my understanding, the matter is dealt with politically as the two parties are negotiating how to resolve it, but by far nothing has come to me on the matter. So I believe they are still substantively engaging each other,” Toteng said briefly in an interview on Thursday.

UDC petitioners saddled with costs after mounting an unprecedented legal suit before the court to try and overturn BDP’s October 2019 victory. The participants in the legal matter involves 15 parliamentary candidates’ and nine councillors. The UDC petitioned the court and contested the outcome of the elections citing “irregularities in some of the constituencies”.

In a brief ruling in January 2020, Judge President Ian Kirby on behalf of a five-member panel said: “We have no jurisdiction to entertain these appeals. These appeals must be struck out each with costs including costs of counsel”. This was a second blow to the UDC in about a month after their 2019 appeals were dismissed by the High Court a day before Christmas Day.

This week BDP attorneys decided to attach UDC petitioners’ property in a bid to settle the debts. UDC President Duma Boko is among those that will see their property being attached with 14 of his party members. “We have attached some and we are on course. So far, Dr. Mpho Pheko (who contested Gaborone Central) and that of Dr, Micus Chimbombi (who contested Kgalagadi South) will have their assets being sold on the 5th of February 2021,” BDP attorney Basimane Bogopa said.

Asked whether they met with UDC lawyers to try solve the matter, Bogopa said no and added. “Remember we are trying to raise the client’s funds, so after these two others will follow. Right now we are just prioritising those from Court of Appeal, as soon as the high court is done with taxation we will attach.”

Saleshando, when contacted about the outcomes of the meeting with the BDP, told WeekendPost that: “It would not be proper and procedural for me to tell you about the meeting outcomes before I share with UDC National Executive Committee (NEC), so I will have to brief them first.”

UDC NEC will meet on the 20th of next month to deal with a number of thorny issues including settling the legal fees. Negotiations with other opposition parties- Alliance for Progressives and Botswana Patriotic Front (BPF) are also on the agenda.

Currently, UDC has raised P44 238 of the P565 000 needed to cover bills from the Court of Appeal (CoA). This is the amount in a UDC trust account which is paltry funds equating 7.8 per cent of the overall required money. In the past despite the petitioners maintaining that there was promise to assist them to settle legal fees, UDC Spokesperson, Moeti Mohwasa then said the party has never agreed in no way to help them.

“We have just been put in debt by someone,” one of the petitioners told this publication in the past. “President’s (Duma Boko) message was clear at the beginning that money has been sourced somewhere to help with the whole process but now we are here there is nothing and we are just running around trying to make ends meet and pay,” added the petitioner in an interview
UDC NEC has in December last year directed all the 57 constituencies to each raise a minimum of P10, 000. The funds will be used to settle debts that are currently engulfing the petitioners with Sheriffs, who are already hovering around ready to attach their assets.

The petitioners, despite the party intervention, have every right to worry. “This is so because ‘the deadline for this initiative (P10, 000 per constituency) is the end of the first quarter of this year (2021),” a period in which the sheriffs would have long auctioned the properties.

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Boko-Khama axis viewed with suspicion

25th January 2021

President of the Umbrella for Democratic Change (UDC) Duma Boko’s alliance with former President Lt Gen Ian Khama continues to unsettle some quarters within the opposition collective, who believe the duo, if not managed, will once again result in an unsuccessful bid for government in 2024.

While Khama has denied that he has undeclared preference to have Boko remaining as leader of UDC, many believe that the two have a common programme, while other opposition leaders remain on the side-lines.

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