Former minister of defence and military veterans Lindiwe Sisulu has left a giant headache for her successor, Nosiviwe Mapisa-Nqakula.
Mapisa-Nqakula was served a summons by the aviation group AdoAir either to validate the R830-million contract it was awarded to lease two luxury jets to the presidency or pay damages of R200-million.
This week Mapisa-Nqakula's lawyers filed papers in the North Gauteng High Court in Pretoria revealing her intention to oppose AdoAir's demands on the basis that the defence department had obtained two damning legal opinions on the contract.
By contrast, Sisulu was hoping her department's "bona fide" negotiations with AdoAir over the terms of the contract and compliance issues would avoid further litigation and controversy. This emerged in court papers in May this year after AdoAir took Sisulu as defence minister and key defence officials to court over its contract to lease two Embraer Lineage 1000 VIP jets from the company for five years.
While the court case was proceeding, intense negotiations were going on behind the scenes between top defence department officials and AdoAir over compliance issues with the contract.
The Mail & Guardian established in a previous investigation that Sisulu obtained a damning legal opinion on the AdoAir contract from consultant Judge Willem Heath last December. Legal sources have expressed concern that the report was not used to strengthen the government's case against AdoAir in court this year.
Heath found many irregularities in the contract and declared it was invalid. The M&G was informed this week by a defence source that the defence department obtained a second legal opinion, which supported Heath's view.
As defence minister, Sisulu was named as the first respondent in the court case brought by AdoAir, which was applying for a review of the matter because it believed that a decision had been taken by the defence department not to go ahead with the contract. But the chief financial officer of the defence department, Mziwonke Dlabantu, who acted as secretary of defence for a short time, said in a court affidavit that it became clear to him that the dispute over the contract with AdoAir "was more imaginary than real".
"I assure the applicants [AdoAir] that the award had not been cancelled. I contended that bona fide negotiations on the contract were necessary in order to ensure that a compliance lease was produced," he said in court papers.
Sisulu was hoping to settle the Embraer Lineage jet deal amicably. (Gallo)
A falling-out over the contract led to the dramatic resignation of secretary of defence Mpumi Mpofu last year. Acting on advice from her legal advisers, Mpofu steadfastly refused to sign the AdoAir contract before she quit her job. Because she was the accounting officer for the defence department, the contract could not go ahead.
Mpofu resigned in October, shortly before Deputy President Kgalema Motlanthe was forced to abandon a leg of a diplomatic trip to Europe after his VIP plane experienced technical difficulties on take-off from Waterkloof Air Force Base. The incident was widely accepted by the media as the reason for her resignation, but a source close to her said she faced intolerable pressure from department officials to sign the AdoAir contract and quit for that reason.
Sisulu's spokesperson, Ndivhuwo Mabaya, said this week the minister was not involved in the procurement processes of the defence department and had no comment to make about the AdoAir case. "The accounting officer [secretary for defence] and the air force managed that process and took decisions on what steps to take, when and why. Please engage with the secretary for defence or the South African National Defence Force."
Mapisa-Nqakula's spokesperson, Sonwabo Mbananga, said he could not comment on the matter because it was sub judice. "But I can say that the minister will be opposing the summons from AdoAir."
In his in-depth legal opinion on the contract, Heath found it irregular that AdoAir required a R20-million upfront deposit from the defence department.
Outlining many irregularities in the procurement process, Heath alleged that AdoAir was not compliant with black economic empowerment policies, no external evaluation had been done to prove the company was in good financial standing and it was a closed tender that should instead have been advertised.
Apart from listing what he alleged were fraudulent misrepresentations in the contract, Heath was disturbed that no evaluation was done of the two jets being offered for lease. His report illustrated that a cash purchase of the two jets would have cost the state about R572-million, a substantial saving on the contract lease price.
In terms of the tender requirements, AdoAir should have provided proof of the aircraft's availability, but Heath found the company did not even have the jets at the time of tendering.
The M&G was told by an aviation source this week that AdoAir did not own Embraer Lineage jets and several senior people in the industry said they did not understand how the company won the contract.
Nigerian Adegboyega Olulade is the chairperson of AdoAir, which is based at Lanseria airport outside Johannesburg. The M&G sent questions to Olulade in Nigeria about his operations earlier this year, but he referred them to the AdoAir attorney, Gerrie Ebersohn.
Mired in controversy
According to AdoAir's brochure, it runs a world-class VIP lounge and handles passengers and aircraft, including aircraft maintenance, sales and consulting.
Ebersohn said this week AdoAir's court case over the contract had not yet been finalised. "No, we haven't settled the case yet. Last month we issued summons against the government."
The contract has been mired in controversy from the start when it was announced in April 2011 that the South African Air Force would lease the jets from AdoAir.
It has been a perplexing court case to follow, even for some defence officials, who could not understand why Sisulu was not trying to get out of the contract based on Heath's legal opinion.
In papers submitted to the court in May, the newly appointed secretary for defence, Sam Gulube, backed up Dlabantu's affidavit and also denied that a decision had been taken by the department or Sisulu to cancel the agreement with AdoAir. Instead, he stated, the minister was committed to "bona fide negotiations" over the terms of the contract, which had to be concluded in reasonable time.
"The position is that, as a matter of fact, the parties have been engaged in negotiations (on the department's side certainly in good faith), which commenced shortly after the replying affidavit was filed," Gulube stated in his supplementary affidavit. "I submit that it is necessary and in the interests of justice that these developments are brought to the attention of the court."
Attorney Barnabas Xulu from Xulu Liversage, who at the time was representing Sisulu and the defence department, said in his affidavit submitted to the court that Sisulu had always wished to seek "non-litigious ways" of resolving the dispute with AdoAir.
"The first respondent [then-minister of defence Sisulu] took the view that the applicant's complaint [AdoAir] could be resolved through engagement and gave firm instructions in that regard.
"The attitude of the first respondent was that, since she or any of her officials had not taken a decision not to proceed with the award, the applicant could be assured of this position by the engagement of the first respondent in extended bona fide negotiations for purposes of complying with the letter of award, in so far as it required that a lease agreement is concluded," Xulu wrote.