Back in 2014, the Airports Company of South Africa announced that it was overhauling its airport advertising model. Companies were invited to tender, with applications due in by February 2015. It is nearly five years later, and still a tender has not been awarded. What’s going on?
The Airports Company of South Africa’s lucrative airport advertising tender has been cancelled again. The deal, it seems, is mired in legal issues, and not just in terms of advertising.
Smart Airport Media is a joint venture (JV) comprising Outsmart Outdoor Advertising, Los Pepes and Nfinity. “The purpose behind creating the joint venture was to bring together a team of transformed industry specialists who, as a collective, were able to deliver the best possible solution for ACSA by providing a service offering which would allow small to medium size transformed entities to compete effectively and efficiently with the bigger players who have to date monopolised the market,” a spokesperson for the JV told The Media.
The JV says ACSA on the face of it was complying with the law by inviting parties to tender for certain opportunities. But the reality, they say, is that “this is just a façade as there is no real intention to allow new entrants into this market and that the very same incumbents simply remain in occupation and possession of the rights afforded to them by ACSA”.
This is not so, says ACSA. The entire advertising tender (issued in 2017) was cancelled and bidders were notified accordingly. Therefore, it says, “Claims of actual litigation related to this specific tender are therefore moot”.
Embroiled in litigation
The ACSA is embroiled in procurement related litigation “that is not connected to the advertising tender but which will provide clarity on certain principles and the approach preferred by the company”. It says it is waiting for finalisation of this legal process before re-issuing the advertising tender. Again.
“The time required to finalise this litigation is dependent on the parties and the courts. We are therefore unable to indicate when this matter may be completed,” a spokesperson says.
Smart Outdoor Media are having none of it. “When we were then advised in June 2018 that the tender under reference COR51/2017 had again been cancelled we simply could not accept this nor could we accept the basis for such cancellation as was put forward by ACSA,” the spokesperson says.
“We were left with no option but to challenge ACSA and launched review proceedings to challenge the cancellation of the tender and the continuous renewal of the current advertising concessionaires’ rights to continue to provide advertising services to ACSA.”
As part of the review, and in order to assess how the tender/s were managed, ACSA had to provide Smart Outdoor Media with its records. “This documentation served to confirm our concerns that ACSA’s conduct was, in our opinion, not above board, as it revealed that the bid adjudication committee had in fact recommended that our consortium be recommended for an award based on our bid,” the spokesperson says.
“It would also seem, from the information and documentation which we have to hand, that what then transpired is that after the bid adjudication committee made the recommendation to make the award to our joint venture, that the bid was then cancelled, although not conceded to by ACSA, but as a result of one of the current concessioners being excluded from this process as their BEE certificate was non-compliant”
Not transparent, open or fair
The company is concerned ACSA’s process was “neither transparent nor is it open or fair but it has rather been designed to ensure that the current incumbents remain in possession of their sites”.
ACSA, though, says it is committed to transformation. “It is essential that any company wishing to do business with Airports Company South Africa or planning to submit tender bids should be aware of our unwavering commitment to genuine and tangible transformation,” the spokesperson told The Media.
“In aligning our Group needs with those of our stakeholders, we have awarded work packages that will increase the participation of black-owned businesses in our operational, developmental and commercial procurement,” it says. “Our record of including emerging SMME contractors in IT projects is an effective model to be replicated in other sectors once litigation has settled and decisions handed down, and this will fundamentally alter the tenant mix in our airports and the way we do business with local communities.”
ACSA in its Annual Report admits it has been a difficult year in terms of transformation due to “ongoing litigation directly related to our intention to transform our supplier and contractor base”.
It says important lessons were learned as the litigation proved instructive in the company’s understanding and interpretation of regulations related to transformation and the need for constant supplier engagement to ensure that all stakeholders’ objectives are aligned. “Ongoing litigation continues to affect our ability to advance our transformation objectives within our seven sector strategies: ground handling, car rental, retail, property, construction, IT and advertising sectors of the business, and test the ability to be agile in the generation of revenue growth within the commercial space”.
It says it is dealing with outdated retail fittings and extended leases “which do not provide optimal turnover and rental revenue for our airports, pending the outcome of litigation which will enable us to drive our transformation objectives as well as define our go-to-market strategy for commercial opportunities”.
Smart Outdoor Media says “as matters currently stand, and after having challenged this process, and after having demonstrated, as we see it, that the process is both flawed and contrary to the very prescripts of our Constitution, the current concessionaires remain in possession and occupation of these particular sites. This is, simply, unacceptable”.
The JV is determined to see the legal review, currently underway, to its conclusion.
“As indicated, as part of the process ACSA was to provide us with a complete record of all of their documents relating to the decision which has been taken. Certain of the documents have not been provided and we have now been forced to compel the provision of these documents. An application to compel the outstanding portion of the record will be issued soon,” says the spokesperson.
“The only realistic outcome for us is that the facts of this matter must be presented before a Court of Law for the Court to make a decision as we believe that ACSA has acted unlawfully and unfairly in this process,” the spokesperson says. “It is precisely these practices which need to be stopped so as to ensure that transformation, which is a national imperative, becomes a reality within our industry.”
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