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Airports Company flying high after win

State-owned Airports Company South Africa (Acsa) yesterday emerged victorious in its long-running legal battle with three of its contractors over the lucrative tender to operate duty-free stores in three of its airports.

The majority decision by the Constitutional Court paved the way for Acsa to go out on tender after an almost 10-year legal battle. The long-running matter began in 2009 when, after a competitive bidding process, Acsa awarded a contract to Big Five to operate duty-free shops at the airports for 10 years. One of the unsuccessful bidders, Flemingo, then launched a court bid to set aside the contract. While both Acsa and Big Five opposed the application for review, the high court in Pretoria found in Flemingo’s favour.

Big Five, in turn, appealed the high court decision. However, even before the matter could be heard, Big Five and Flemingo settled the matter, which was later made a court order. Acsa would, however, have none of this and said it would not recognise the settlement and would embark on a bidding process to award the contract afresh. The tit-for-tat took another twist last year when the Supreme Court of Appeals ruled in Big Five's favour that Acsa could not reopen the bid anew.

However, Justice Johan Froneman took issue with the settlement reached between Big Five and Flemingo, details of which were sketchy. “No reasons need to be given and whatever factors induced the settlement will usually remain unknown to the public and the court,” Froneman said. “In the face of uncertainty, it is a mistake to place the entire weight of the interpretative exercise on what the court thinks the parties’ intention might have been.” Acsa said the judgment has significant implications for the way tender processes are conducted and disputes resolved.

“We hope that bidders will appreciate that Airports Company South Africa will continue to take every possible step to ensure that tender processes are conducted fairly and in accordance with the law,” Acsa said in a statement. Acsa, which owns and operates nine airports, has been engaged in legal battles with some of its contractors. In July, the high court in Joburg dismissed Acsa’s bid to cancel the multimillion-rand tender for grass-cutting and vegetation services it had awarded to Tswelokgotso Trading Enterprise.

Meanwhile, the group yesterday reported revenue of R6.9billion and earnings before interest, tax, depreciation and amortisation (Ebitda) of R3bn for the year ended March. In the comparative period, the company posted R8.6bn in revenue and R5.1bn in Ebitda.

Source: www.iol.co.za

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Airports Company flying high after win

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