Windhoek-The Supreme Court on Friday set aside the award of the 200MW gas power tender to politically-connected Xaris Energy, just days after NamPower announced it had cancelled the project in its entirety.
Judge of Appeal Dave Smuts, with Judge of Appeal Sylvester Mainga and Judge of Appeal Elton Hoff concurring, upheld the appeal of Arandis Power that argued that the tender process was irregular, and unfairly favoured Xaris Energy in many ways.
In an earlier judgement in the High Court, Judge Collins Parker upheld an objection by Xaris and the other respondents who include the President of the Republic of Namibia, the Cabinet of the Republic of Namibia, the Minister of Mines and Energy, Namibia Power Corporation (NamPower) and Sinohydro Corporation, that the review application was launched out of time and was unreasonably delayed.
He had also ordered Arandis Power to pay the costs of the respondents.
Not satisfied with the High Court judgement, Arandis Power approached the Supreme Court to review and set aside the decision of Judge Parker.
They claimed that various factors, including interference by Cabinet in the award of the tender, caused the delay and that they launched their application soon after they discovered that Xaris was given the go-ahead. Arandis further claimed that the award of the tender to Xaris was unlawful as it was done after the validity period of the tender elapsed.
Judge Smuts found that the High Court’s order to dismiss the review application on the basis of undue delay was not interlocutory in nature as argued by Xaris, because it finally disposed of the matter. Another objection, raised by NamPower, was that the project was cancelled and as such there is no need for the appeal to proceed.
According to the judge, what is in dispute is the validity of the tender award to Xaris. He mentioned that NamPower has conceded that the award was made outside of the time limit as per the terms of reference of the tender itself. However, the judge said, while Arandis conceded that the appeal would be moot since the project was cancelled, Xaris did not acknowledge this and intend to take legal action as a consequence.
But, Judge Smuts said, the validity of the award is the subject of the appeal, which means that the appeal is by no means moot. “There is a live and existing dispute between the parties to this appeal concerning the validity of the tender award which is raised in this appeal,” he reasoned.
“A pronouncement on that issue may have a clear practical effect if the award is declared invalid.”
The appeal judge said that it was established that NamPower did not make an award during the validity of the competing tenderers and that NamPower’s policy expressly requires it to award a tender within the validity period. He further stated that NamPower did not invoke its provisions for extending the validity period of a tender. He said NamPower’s Procurement Policy determines the validity of the process and the policy makes it clear that a tender must be awarded within the tender validity period.
“In the absence of an extension, it was no longer open to NamPower to accept a tender. The tender process had thus been completed upon the expiry of the validity period, albeit unsuccessfully,” Judge Smuts