Why Air Botswana, Comair talks collapsed

Staff Writer
Sticking points on restructuring has led to the collapse of contract negotiations for the management of state-owned Air Botswana, government sources have revealed.

Ministry of Works and Transport sources privy to the negotiations say that one of the sticking points is the proposed retrenchment by the management company Comair.
 It is understood that as part of the restructuring of the national flag carrier, Comair wanted to trim down the staff compliment at Air Botswana, particularly the top managers. The company felt the managers are too many and this has caused a duplication of roles and imposed a huge burden on costs.

It is understood that Comair has problems with the ageing Air Botswana fleet and had provided alternatives, which the government turned down.

Government now plans to negotiate a management contract for Air Botswana with International Development Ireland (IDI).

 Comair was selected as the top ranked bidder for the airline's management job in May after an international tender process.

The second-ranked bidder, IDI in association with Aer Araan, an Irish regional airline, was retained as reserve bidder to be considered in the event that negotiations with Comair are unsuccessful.

To undertake the negotiations with Comair, the government formed a high-powered negotiating team led by Kago Moshashane, Permanent Secretary, Ministry of Works and Transport.

When negotiations began in June, it was expected that the management contact would be concluded by July 2008. However, during the negotiations, several major issues could not be resolved.

Some of the contentious issues revolved around the services that Comair planned

to offer and the extent of responsibility it would bear as the management contractor.

 The government negotiating team met Comair representatives for the last time on 11 September in Gaborone. When the talks concluded without agreement on the outstanding issues, the government team invited Comair to reflect on its position and make further suggestions to try to resolve the issues.

However, after consulting its board on 15 September, Comair informed the Ministry of Works and Transport that it had been unable to find solutions and it has decided to withdraw from pursuing the management contract.

Following Comair's withdrawal, the ministry has invited IDI to enter into negotiations for the management contract. It is expected that negotiations will commence this month. Established in 1989 by the Irish government's economic agencies to provide practical knowledge to support the development of emerging markets, IDI specialises in planning and managing projects.

The company provided an operational team, which helped restructure and reposition the national fixed line operator, Botswana Telecommunications Corporation (BTC). The move restored BTC to profitability.

In his 2008 budget speech, Finance and Development Planning Minister Baledzi Gaolathe announced that the government had set aside P103 million to re-capitalise Air Botswana.This would cover the costs of overhauling the French-made ATR aircraft, disposal and replacement of the loss-making BAE146-100 aircraft, improving the salaries of pilots and hiring a management contractor.



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