Child’s N$1.3bn tender put on hold

A pharmaceutical company was last Wednesday granted an interdict to stop the implementation of a N$1.3 billion tender, awarded to a company whose majority shareholder is a five-year-old child, while the tender award is reviewed.

The Windhoek High Court granted an urgent application for the interim interdict despite the Central Procurement Board of Namibia's (CPBN) claim that the shortage of pharmaceutical products could worsen in the coming months if it is granted.

This after Africure Pharmaceutical Namibia, owned by businessman Shapwa Kanyama, was awarded a tender in April for the supply of pharmaceutical products to the health ministry worth approximately N$123 million.

However, after Cospharm Investments, which was initially disqualified, submitted an application for reconsideration, the awards were adjusted.

Cospharm, the company majority-owned by a child while his Zimbabwean-born father is a minority shareholder, was awarded a tender worth N$1.3 billion, and Africure's tender was reduced by around N$78 million.

Africure brought an urgent application to obtain the interdict and, as the second part of its application, it requests the court to review and set aside the decision to award the billion-dollar tender to Cospharm.

The second part of the application, in which the decision will be reviewed, is still ongoing and has been postponed to 16 January.

Interdict

During the hearing, the CPBN argued that Africure will not suffer any damage and will continue to deliver the tender awarded to it to the value of N$45 million. It also argued that Africure had the tender award reviewed by the court without an interim interdict.

"The board shies away from the fact that once it signs contracts, the contracts with the other bidders create a valid legal relationship between it and those bidders and the bidders will deliver the pharmaceutical products," Judge Shafimana Ueitele said in his ruling.

Both Cospharm and the CPBN had problems with the urgency of the matter.

They argued that the applicant had not explained why it took more than 10 days to launch the application.

"I am not convinced that the applicant [Kanyama] created the urgency himself by not acting earlier. As soon as he was informed of the board’s decision, he set in motion the process of challenging the decision," the ruling read.

Review

Africure's review application is based on the allegation that the CPBN failed to ensure that he was treated procedurally fairly in terms of section 18 of the constitution.

"Section 18 imposes a duty on administrative bodies and officials to carry out legal, reasonable and procedurally fair administrative actions."

"If this right is not protected, it will cause irreparable damage," Ueitele said.

The other basis for Africure's application is the claim that the board’s decision to adjust the tender award was not made and communicated within the seven-day period as required by law.

The CPBN said it made the decision within seven days, but admitted that it only communicated it to Cospharm at a later stage.