Update

PLETTENBERG BAY NEWS - The implosion of the deal to revive Plettenberg Bay Airport could result in being a costly affair for the Bitou municipality, with estimates that about R4 million has already been spent on legal fees.

In addition rsa.AERO, the company that won the tender to manage the airport, has claimed R6m for reimbursement of costs, of which Bitou municipality has agreed to pay R1.8m, subject to the claims being verified.

Costs the municipality recommended must not be approved included R1.2m for "executive bidder team costs" and R2.8m related to fuel tanks.

Runway renovation

The latest developments around the airport deal mean that commercial flights will not resume until such time as funding for the renovation of the runway is secured and a reapplication for a Category 5 airport licence from the Civil Aviation Authority (CAA) is successful - which could take at least six months or longer.

'Breach of contract' 

In a letter to the municipality on 15 January Garden Route Aero placed Bitou municipality "in breach of contract".

In a follow-up letter on 3 February Nick Ferguson, rsa.AERO managing director, claimed R6m for reimbursement of costs, as a result of the municipality’s alleged actions.

'Reputational damage'

“Please note that this does not cover our damages and is purely a reimbursement of our costs. Should we be required to take this matter to court and claim damages, it is highly likely that the claim will be significantly higher and could include claims for reputational damage,” said Ferguson.

A resolution to terminate the airport deal was passed at a special Bitou council meeting on Friday 14 February and it comes a year after rsa.AERO won a tender to operate and manage the airport.

Recommendation accepted

The ruling coalition in council voted 7 to 5 to accept municipal manager Mbulelo Memani's recommendation to formalise the termination agreement.

Memani said in his report to council the two entities had reached a stalemate over a contractual dispute.

The municipality wanted to "rectify" a signed agreement with a new agreement and service level agreement, drawn up by legal counsel, that rsa.AERO did not accept.

Key factor

This rendered the "whole process to be mute", said Memani in his report.

Key throughout the process was the upgrading of the airport's runway.

Deidre Davids, spokesperson for rsa.AERO confirmed that "Garden Route Aero, the company responsible for managing the Plettenberg Bay Airport, formally placed Bitou municipality in breach of contract on 15 January".

Davids said this followed "unsuccessful attempts to progress and agree on key contractual matters".

'No meaningful progress'

"We remained optimistic and hopeful that we could find a resolution and a way forward, but no meaningful progress has been made.

"In the interest of bringing this matter to an amicable resolution, we have proposed a settlement for their review and consideration," said Davids.

She said rsa.AERO was awaiting a formal response and are unable to provide further feedback until then.

'Right decision'

Steve Pattinson, chairman of the Hangar's Association, said the airport saga has "unfortunately been an expensive process".

"Having reviewed all the information, we are confident that Bitou has made the right decision to terminate this agreement," said Pattinson.

"We look forward to informing you of the way forward, with a clear timeline on runway renovations as well as when we can expect commercial operations to resume."

Read previous article Plett airport deal crashes | Knysna-Plett Herald 

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