TransNamib terminates AIJ contract
A showdown between TransNamib and AIJ Property Management seems imminent, as the two entities are disagreeing on the status of a lucrative contract in which the private company had to manage the parastatal's huge property portfolio.
TransNamib CEO Johny Smith last week said the parastatal had duly given AIJ notice as per the contractual agreement that it would terminate the three-year contract.
The TransNamib board under the leadership of Paul Smit had reportedly entered into the contract with AIJ in September 2016 and it was to run out around the middle of next year.
According to the TransNamib management the contract had run out in June this year after AIJ was served with the termination notice in April.
However, AIJ, through its spokesperson, Abed Erastus, said the “agreement for services with TransNamib is still in force”.
A source said AIJ was contracted to relook at all the lease agreements entered into for the use and occupancy of TransNamib's land and properties, sign new, market-related lease agreements, collect rent, manage water and electricity bills as well as administer rates and taxes on these properties.
This source said the TransNamib property portfolio was valued at close to N$3 billion.
AIJ's Erastus would not divulge any information this matter, but Smith, though reluctant to go into details, said the contract was detrimental to TransNamib.
Smith said since he took over the reins as the new TransNamib CEO about six months ago his focus was to turn the parastatal into a profitable venture in the medium to long term, which included relooking at some of the agreements the parastatal had entered into.
He said he investigated the AIJ contract and found a number of things wanting.
“Many wrong decisions, what I call snakes, have been made,” Smith said about previous decisions and commented that the management of the property portfolio should not have been outsourced.
He added that TransNamib “cannot further continue” with AIJ because it had signed “unauthorised” long-term lease agreements on behalf of TransNamib, adding that neither he nor his executive team had been aware of some of these agreements.
AIJ has reportedly signed close to 20 lease agreements, mostly in Windhoek, on behalf of the parastatal.
Smith said with the appointment of Alynsia Platt as TransNamib's new executive of properties in May, and the restructuring of the property division, the company took over the work previously outsourced to AIJ.
AIJ was reportedly paid about N$1 million per year.
Smith said TransNamib was now collecting outstanding rent from tenants.
“We have sent out letters of demand for all the outstanding debt and we will follow the procedure to make sure we improve on this situation just like anything else,” Smith said.
TransNamib board chairperson Paul Smit would not comment on the contract the board had signed with AIJ.
“This matter is not for public consumption; we first need to go through procedures,” Smith said.
CATHERINE SASMAN
TransNamib CEO Johny Smith last week said the parastatal had duly given AIJ notice as per the contractual agreement that it would terminate the three-year contract.
The TransNamib board under the leadership of Paul Smit had reportedly entered into the contract with AIJ in September 2016 and it was to run out around the middle of next year.
According to the TransNamib management the contract had run out in June this year after AIJ was served with the termination notice in April.
However, AIJ, through its spokesperson, Abed Erastus, said the “agreement for services with TransNamib is still in force”.
A source said AIJ was contracted to relook at all the lease agreements entered into for the use and occupancy of TransNamib's land and properties, sign new, market-related lease agreements, collect rent, manage water and electricity bills as well as administer rates and taxes on these properties.
This source said the TransNamib property portfolio was valued at close to N$3 billion.
AIJ's Erastus would not divulge any information this matter, but Smith, though reluctant to go into details, said the contract was detrimental to TransNamib.
Smith said since he took over the reins as the new TransNamib CEO about six months ago his focus was to turn the parastatal into a profitable venture in the medium to long term, which included relooking at some of the agreements the parastatal had entered into.
He said he investigated the AIJ contract and found a number of things wanting.
“Many wrong decisions, what I call snakes, have been made,” Smith said about previous decisions and commented that the management of the property portfolio should not have been outsourced.
He added that TransNamib “cannot further continue” with AIJ because it had signed “unauthorised” long-term lease agreements on behalf of TransNamib, adding that neither he nor his executive team had been aware of some of these agreements.
AIJ has reportedly signed close to 20 lease agreements, mostly in Windhoek, on behalf of the parastatal.
Smith said with the appointment of Alynsia Platt as TransNamib's new executive of properties in May, and the restructuring of the property division, the company took over the work previously outsourced to AIJ.
AIJ was reportedly paid about N$1 million per year.
Smith said TransNamib was now collecting outstanding rent from tenants.
“We have sent out letters of demand for all the outstanding debt and we will follow the procedure to make sure we improve on this situation just like anything else,” Smith said.
TransNamib board chairperson Paul Smit would not comment on the contract the board had signed with AIJ.
“This matter is not for public consumption; we first need to go through procedures,” Smith said.
CATHERINE SASMAN
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