Acsa, Swissport fall out over BEE clause

● An international spat is brewing over the country’s black economic empowerment laws as Swiss-owned baggage handler Swissport takes on the state-owned Airports Company South Africa (Acsa) over black shareholding requirements for a groundhandling tender.

Swissport CEO Peter Kohl, in an affidavit filed with the South Gauteng High Court last month, requested that the court review, correct or set aside Acsa’s invitation for contractor proposals for licences to provide groundhandling services at the company’s airports, which include OR Tambo and Cape Town international airports.

Swissport, which has been providing ground-handling services at six of SA’s airports since 1998, has accused the airports company of employing an “unlawful” procurement process because it did not structure the invitation in accordance with the Preferential Procurement Policy Framework Act and the constitution.

Kohl said a black ownership clause in the invitation was one of the main issues Swissport had with the procurement process. The clause stipulates that bidders commit to 51% black ownership at the first anniversary of the licence agreement, which must be maintained for the duration of the licence.

He said Swissport’s parent company would prefer not to increase the company’s broad-based black economic empowerment (B-BBEE) ownership to 51%, as per the invitation’s requirement, because the requirement had been unlawfully imposed.

He added that the parent company was also loath to relinquish management control of Swissport because this was not in line with its governance oversight of its local subsidiaries and effective control was essential in order to enable Swissport’s results to be consolidated in its parent company’s financial results and to ensure quality control of an area in which it has extensive experience.

Swissport operates in SA with 51% majority holding, with the balance of the shares held by empowerment partner Clidet. While it waits for the outcome of the court process, Swissport has still submitted a bid according to the black ownership clause.

“Acsa has presented Swissport with little choice: if Swissport refrains from bidding or if Swissport submits a noncompliant bid then its business operations in SA will come to an end,” Kohl said.

In response to Swissport’s application, Acsa said it could not rely on the act for guidance because ground-handling services are provided to airlines and not to Acsa, and therefore Acsa does not enter into a contract directly with ground-handling companies, but facilitates this service for airlines.

“All suppliers have had perhaps as many as 24 years to come to terms with what real transformation means,” Acsa said in response to queries from Business Times.

It said although it may not fit Swissport’s business model, ground handling was an area that was identified for large-scale transformation.

“Unfortunately, Swissport elected immediately to take an aggressive stance against transformation and never formally forwarded alternative solutions during the process that was followed,” said Acsa.

The Swissport litigation is just one in a string of recent cases against Acsa. In July a ruling by high court judge Philip Coppin forced it to scrap a request for bids it issued last year for 10 car-hire concessions at nine airports. Coppin ruled that the attempt to exclude Imperial on empowerment grounds was unconstitutional.

Swissport took a stance against transformation

Acsa

In response to Swissport’s court action