BTO in another tourism dispute

In a case with all the contours of one that Botswana Guardian reported on last week of a safari tour operator fighting tooth and nail to thwart eviction efforts by the Tawana Landboard, another called Lodges of Botswana (LoB) is waging a similar campaign. The latter has been occupying the area since 1983, five years after its managing director, Peter Sandenbergh, who is now a permanent Botswana resident, settled in Maun.
In a case before the Gaborone High Court, LoB is preparing to battle five parties: the Landboard, the Botswana Tourism Organisation (BTO), Kutjavetira Mauano, Myra Sekgororoane and Afritech Resources. Mauano is the Landboard chairperson, Sekgororoane the CEO of BTO and Afritech Resources a company that also tendered for rights to operate camps in the area. On account of a Court of Appeal order, LoB remains in occupation of the area despite the fact that its lease expired on December 31, 2012.
This is a big-money project: the minimum reserve land rental for the zone is P690 000 at an annual escalation of 10 percent. The minimum reserve for the royalty fees is 6 percent of the operator's annual revenue. Both rentals and resource royalties are subject to review after every five years and the proposed maximum number of beds is 46.
LoB twice submitted a tender to continue operating two safari camps (Delta and Oddballs, approximately five hectares each) for another 15 years and in both cases was later informed by the Landboard that its tender had been unsuccessful. The company’s technical proposal fell below the 70 percent pass mark in an evaluation exercise done by BTO officials. In line with the rules, the tender did not proceed to the financial evaluation stage and its financial proposal was therefore not opened. Subsequent to this, the Landboard secretary, Tlotlego Rampha, notified LoB that it had failed to submit “a professionally acceptable” tender document and accordingly, that its tender was disqualified.” The company was instructed to hand over and vacate the camps by December 31, 2012.
In his court papers, Sandenbergh says that he was “shocked and bewildered” when he received this letter and that on the same day sent the Landboard a letter of reply. Noting  that the right to the area had not been awarded to anyone else, he requested an extension of time to vacate the sites. However, he had a change of heart soon thereafter and started fighting back.
“After having considered the matter more carefully and having been furnished with legal advice inter alia that the conduct of the [Landboard] was grossly unreasonable and irrational and contrary to the law, the applicant, in its attorney’s letter of December 10 2012, withdrew its request for more time to vacate the sites,” his affidavit says.
Indeed on the said date, BTO’s lawyers, Collins Newman and Company wrote LoB’s lawyers, Collins Chilisa Consultants to notify it a resolution had been made to revoke the eviction of the company from the camps.
Subsequent to this, Sandenbergh took the Landboard to High Court, lost and proceeded to the Court of Appeal which ruled in his favour. The judgement restrained the Landboard from removing LoB from the concession area and from interfering with its occupation of this area in any way. This was an interim interdict pending the final outcome of tender proceedings to determine who shall be awarded the concession area and further pending the finalisation of review proceedings to be instituted in the High Court. This is where the matter is now.
LoB contends that it submitted “a comprehensive and professionally prepared tender proposal” and that it gave “thorough consideration” to the tender requirements.
“In compiling the second tender submission, the appellant reviewed its first tender proposal and endeavoured to improve it by presenting the submission in a larger (A3) format; detail was added to the architectural presentation and certain sections were revised in order to include more information. The appellant employed professional consultants and architects who had expertise and experience in the field and who, at substantial expense to the appellant, undertook work which included the redesign of various aspects of the camps so as to enable the appellant to improve its grading standard,” states Sandenbergh’s affidavit, adding that the finding and decision of the Landboard that LoB’s tender proposals were not professionally acceptable, amounted to no more than “a rubberstamping” of the recommendation of BTO.
He further contends that the scoring of the company’s first and second tender proposals was “arbitrary and unreasonable” and that the stipulated 70 percent score should not have been regarded as the determining factor in deciding whether its proposals were professionally competent or acceptable.
“It did not follow that because the appellant failed to achieve 70 percent (according to the evaluation by the Botswana Tourism Organisation) that its tender proposals were therefore not ‘professionally acceptable.’”
He shines a spotlight on “professional”, asserting that as it applies in the context of the lease agreement and in the instructions to tenderers, it means that in compiling the tender the applicant should employ the skill of a professional person and that the final product should be of a standard that could be expected of a professional person.
“It is submitted that the first and second tender proposals submitted by the appellant were of such a standard,” he argues.
LoB did indeed employ the skills of professional persons in Jonathan Gimpel, a Johannesburg architect; Daniella Sachs, an architect who specialises in implementation strategy in the field of sustainable tourism and economic development; and, Vincent Shacks, an environmental consultant. All have deposed to affidavits in support of LoB’s case.
The lease agreement between the Landboard and LoB has a right-of-first-refusal clause. Right of refusal is a legal principle in terms of which a seller must give a party an opportunity to match a price at which a third party agrees to buy a specified asset on the same terms offered to the third party. This clause reads: “The sitting tenant is expected to tender and shall have the right of first refusal. In the event of the tender by the sitting tenant being professionally acceptable (from a technical and financial perspective), and being bettered by a third party, then, and in such event, the sitting tenant shall be given an opportunity to match the tender proposal of such third party. This effectively means that all bidders, including the sitting tenant, will compete in an open tender; upon evaluation, the sitting tenant would then be given the opportunity to match the overall highest bidder for both technical and financial proposals.”
LoB’s argument is that as the lessee and incumbent operator of the camps, it stands “a very good chance” of bidding successfully for the rights in respect of the sites and that even if it doesn’t win, it is still entitled to match the tender proposal of a third party which bettered its own bid.
In a previous legal tussle at the Court of Appeal, Rampha rejected all charges about his organisation acting in bad faith. He is the one who wrote LoB alerting it to the fact that its lease was about to expire and that it had to hand over and vacate the premises. He stated that any occupation by the company after December 31, 2012 would amount to criminal conduct and expose it to possible criminal prosecution because the Tribal Land Act criminalises illegal occupation of land. Rampha said that it would be improper to allow LoB to illegally occupy land whilst on the other side of the same village, squatters with no certificates of rights were being evicted.
“Occupation of tribal land without appropriate authorisation is illegal and amounts to squatting and the fact that the applicant is operating a tourist enterprise does not make it an exception,” he stated.
While LoB has been quick to assert its right of first refusal, Ramphas interprets this aspect differently from the way he does.
“It is completely denied that the applicant has a right of first refusal as alleged after December 31, 2012. The condition precedent to the right to better a successful tenderer is based on two considerations: that the sitting tenant must submit a professionally acceptable bid. The evidence so far points to the contrary and infact, that on two occasions, the applicant has dismally failed to submit a professionally acceptable bid. Secondly, it is a requirement that he must be able to better the bid of any tenderer who has surpassed him whether technically and/or financially,” his affidavit states.
Rampha has contested Sandenbergh’s assertion that he is conducting “a successful and a profitable business”, saying that there is no evidence to prove that. Seeking to show the apparent absurdity of this reasoning, Rampha said that no one can claim a right to illegally occupy land just because they are running a successful and profitable business. That, he argued, would mean that those whose businesses are not successful should be denied land.
To buttress its case, LoB has made mention of its generosity to the community that it does business in but Rampha counter-argued that the social responsibility programmes that the company carries out are part of the undertakings which concession holders routinely make in their tenders in order “to get higher marks.”
When it brought the Court of Appeal case against the Landboard, LoB argued that it had to stay open to do business because it had no other suitable remedy. Rampha denied this statement, noting that the company could claim damages against the Landboard which has a total asset base in excess of P40 million that includes motor vehicles, several houses, offices and other equipment.
“This excludes concession areas and unoccupied land including rentals from leasehold grants,” he said in his affidavit.
LoB has stated that it has gone to considerable expense developing the sites and that its eviction - as it were - would represent great financial loss. To that Rampha said that the developments are a contractual obligation and that if they had not been made, the company would have been in breach of the contract. He accused the company of using delaying tactics that “will cause prejudice to the Landboard and indeed irreparable harm to the people of Botswana. This is clear case of manipulation of court process by the applicant for its own commercial interest.”
In all, four bids were submitted and only LoB and Afritech Resources’ complied with the submission requirements and qualified to be evaluated. However, neither met the minimum pass mark of 70 percent and the BTO panel resolved that the evaluation of both tenders should not proceed to the next stage of the opening and consideration of the financial proposals. Afritech Resources was disqualified because it included financial information in the technical proposal and only features in the matter because it is an interested party.
In terms of the Court of Appeal order, in the event of LoB being an unsuccessful tenderer, the interim interdict will remain in force for a period of a further three months from the date of determination of the new lessee in order to enable the company a reasonable time to close its business and vacate the sites in question. LoB would have to be fully compensated in the event it vacates the sites.
Last week, Botswana Guardian reported the case of Kwara (Pty) Ltd which is challenging a decision by the Tawana Landboard to replace it with Promotive Investment on a concession area it has been occupying since 2008.