Wants to insource the provision of baggage services and ‘needs’ a system for this.
Airports Company South Africa (Acsa) has been interdicted from adjudicating a tender and awarding a contract valued at R3.15 billion for the purchase of a baggage system for all the country’s airports as part of its plan to insource the provision of these services.
Judge Leicester Adams issued the interdict against Acsa in the High Court in Johannesburg on Tuesday pending the determination of a review application instituted by Aviation Co-Ordination Services (Pty) Ltd (ACS), the Airlines Association of Southern Africa (AASA) and the Board of Airline Representatives of SA (Barsa) on 16 November 2023.
In terms of the order issued, Acsa was:
- Interdicted from taking any steps or any further steps to adjudicate a tender and award a contract/s for the purchase of hold baggage screening (HBS), a baggage reconciliation system (BRS) or baggage management system (BMS) equipment and/or services and implementing its decision taken on 18 May 2023 and confirmed on 8 September 2023 to insource the provision of HBS, BRS and BMS at its airports.
- Directed to allow ACS to replace four Level 3 back-up HBS units with new back-up units at its OR Tambo and King Shaka international airports.
The SA Civil Aviation Authority (SACAA) was also directed to approve the replacement of the back-up units within five days of the interim interdict order for the replacement of those units within 10 days of the order.
Acsa, Minister of Transport Barbara Creecy and SACAA were jointly and severally ordered to pay the costs of the opposed urgent application.
In the 2023 review application, ACS, AASA and Barsa applied for an order declaring unlawful the decision taken by Acsa on 18 May 2023, and confirmed on 8 September 2023, to insource the provision of HBS services currently provided by ACS at all Acsa airports.
The interim interdict application was launched after Acsa during December 2021 to April 2022 consulted with stakeholders on the future of HBS at its airports, including on whether to terminate the provision of HBS services by ACS and to insource these services.
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Dispute
During May 2023 Acsa took the decision to terminate the provision of HBS services by ACS and to insource the provision of these services.
This was subject to approval by the Minister of Transport, which was only given, subject to a condition, on 8 March 2024.
ACS on 17 and 20 May 2024 received notice of termination from Acsa, which also gave notice that it would issue a tender for the provision of these services for the sum of R3.15 billion.
The required Public Finance Management Act (PFMA) approval by the Minister of Transport states that Acsa’s request for approval to acquire HBS equipment is approved on condition of “all legal and operational challenges with regard to [HBS] being fully resolved by Acsa”.
Judge Adams said Acsa’s main gripe with the status quo is that it does not in its view comply with Section 217 of the Constitution.
He said the interdict and the mandamus sought by ACS, AASA and Barsa against Acsa is aimed at preventing unlawful conduct by Acsa.
A mandamus is a court order that compels a government official or entity to perform a legal duty or refrain from doing something that is prohibited by law.
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Judge Adams said the applicants contend that Acsa cannot legally take the steps it has purported to take before the 2023 review application is finally determined and, for this reason alone, the interdict sought against Acsa should be granted.
He said there is a dispute between the applicants and Acsa relating to the statutory right of ACS, with Acsa contending that it – and not ACS – has the right and duty to provide HBS services at its airports on behalf of the airlines.
Adams said this issue is at the centre of the 2023 review application, adding that the provisions of the Civil Aviation Technical Standards (CATS) clearly spells out that it is ACS, on behalf of the airlines, which has the duty and the right to provide HBS services.
He said the applicants also contend that Acsa’s protestations about the potential breach of Section 217 of the Constitution have no merit and, once (this) is accepted, it is the airlines, and therefore ACS, that are responsible for HBS; Section 217 and the PFMA do not apply.
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Technical standards
Adams added that based on the CATS provisions, it can be said that prima facie the SACAA is wrong that it is Acsa that should provide HBS services and should apply for approval for the replacement of HBS equipment.
He said the CATS standards that are relevant to the SACAA’s role are silent on who should apply to the SACAA for the approval of the equipment before it can be procured because the SACAA is responsible for regulating the technical standards of the equipment.
“It should not matter whether it is Acsa, a service provider appointed by Acsa pursuant to a procurement process as Acsa is determined to do, or ACS appointed by airlines who applies.
“All that the SACAA has to satisfy itself with is that the equipment proposed to be procured complies with the relevant technical standards.”
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‘Crippling disruptions’ a ‘real possibility’
Turning to the requirement of irreparable harm, Judge Adams said the interim interdict is necessary to stop Acsa from conducting a tender process, which may turn out to be unlawful.
“The point is that it may well be that Acsa will be incurring expenditure (unlawfully so) in excess of R3 billion.
“Moreover, the installation of equipment at the Acsa airports has the real possibility of resulting in crippling disruptions.
“If Acsa is allowed to continue with its conduct and the applicants ultimately succeed in the 2023 review application, the court may be forced to condone the illegality rather than trying to unscramble the egg because setting aside is a discretionary remedy.
“Accordingly, I am of the view that the requirement of a reasonable apprehension of irreparable harm is established,” he said.
Adams said it has to be accepted, as submitted by the applicants, that civil aviation safety and efficient airport operations are in the national interest and it is undesirable that the procurement of the back-up units is hampered by the ongoing litigation.
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Alternative is at ‘a cost of less than 1%’ of Acsa’s plan
Adams accepted the averment by the applicants that the back-up units are a minor replacement, with a cost of less than 1% of the equipment replacement upon which Acsa has embarked.
He said ACS has also made it clear it will be procuring the back-up units at its own risk and it will sell these units to Acsa or simply remove them if the 2023 review application is unsuccessful
He said the simple fact of the matter is that if the status quo is maintained, Acsa will suffer no harm if its procurement process is halted pending the 2023 review application.
But if Acsa is allowed to go ahead, it will incur expenditure which may turn out to be unlawful and wasteful.
Adams concluded that the applicants do not have an alternative satisfactory remedy and if the equipment that would no longer be supported by the original equipment manufacturer (OEM) fails, the provision of HBS services would be hamstrung.
“That is not the kind of harm that can be diminished by a damages claim,” he said.
“The only suitable remedy is to allow ACS to provide HBS efficiently with the tools it needs. Accordingly, I conclude that a proper case is made out by the applicants for the interim relief sought.”
This article was republished from Moneyweb. Read the original here.
