PLETTENBERG BAY NEWS - The Plett Airport deal between Bitou municipality and rsa.AERO, the company that won the tender last year to run the airport, is heading for the rocks.

This follows a letter from Nick Ferguson, executive director of rsa.AERO, to Bitou municipality on 15 January, after receiving "communication regarding the intended replacement of contracts that were jointly negotiated and signed… as part of the formal tender process".

Ferguson said the letter to Bitou municipal manager Mbulelo Memani, served as a "Notice of Breach of Contract" by the municipality.

'Heading for courts'

It is believed that the saga will now be heading for the courts.

At the centre is believed to be the outstanding question of the runway, repairs of which could cost between R30m and R40m.

Ferguson said agreements - "namely, the Agreement of Sale of Business and the Long-Term Development Lease" - were duly executed on 16 February 2024 and subsequently amended by an addendum, dated, and signed, on 20 August 2024.

"We previously acknowledged receipt of the Bitou municipality's communication regarding the intended replacement of contracts.

Esmaralda Barnes, outgoing Plett Airport manager, alongside a CemAir aircraft when the airline still used the Plett Airport.

"These agreements - namely, the Agreement of Sale of Business and the Long-Term Development Lease - were duly executed on 16 February 2024 and subsequently amended by an Addendum, dated, and signed on 20 August 2024."

'Additional consequences'

Ferguson also informed the municipality of "additional consequences" in that the current airport manager, Esmaralda Barnes, had resigned and that the existing CAA Category 2 Licence for the airport is set to expire at the end of January 2025.

Ferguson wrote: "After conducting a thorough and good-faith review of the proposed new/replacement contract documents, we have identified substantial deviations from the original terms and conditions.

'Unduly restrictive'

"These deviations introduce provisions that are unduly restrictive, onerous, unreasonable, and materially inconsistent with the agreements previously executed between the parties.

"The municipality's persistent inability - or apparent unwillingness - to adhere to the agreements since February 2024, combined with this unilateral attempt to modify key terms, is deeply concerning.

'Valid agreements'

"Such conduct compels us to conclude that the municipality's actions are contra bonos mores.

"Accordingly, we formally request that the municipality immediately cease these efforts and take all necessary steps to comply strictly with the valid agreements executed between the parties.

'Material breach'

"Failure to do so will leave us with no alternative but to protect all our rights in this regard.

"We must also draw your attention to a material breach of the Addendum to the Agreement of Sale of Business and Long-Term Development Lease, dated 20 August 2024. Clause 4.2 of this Addendum stipulates that a payment of R5 million (excluding VAT) was due on 30 August 2024.

'Proof of payment'

"Despite multiple written reminders, this payment remains outstanding as of the date of this letter.

"This non-payment constitutes a serious breach of contract. To remedy this breach, we require proof of payment of the outstanding amount within 10 calendar days from the date of this letter.

"Failure to comply with this demand may compel us to exercise all rights and remedies available under the agreement and applicable law, including seeking full compensation for costs and damages incurred.

"We remain available to engage further and are willing to meet at your earliest convenience to discuss and resolve these matters constructively."

The Knysna-Plett Herald has requested comment from Memani and the Bitou communications department. Once received, it will be published.

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