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NAMIBIA. A bitter row between Namibia Airports Company and its long-time duty free retailer was due to culminate in the latter’s eviction on Friday, according to a well-sourced report in The Namibian.
SE Duty Free Trading has run the duty free shop at Hosea Kutako International Airport near Windhoek for the past decade. But it was served with an eviction order in the High Court last week and given until noon Friday, 21 December to vacate the retail space.
Judge Elton Hoff on Wednesday ordered SE Duty Free Trading to vacate the premises, the newspaper reported. He also ordered the company to pay the legal costs of the Namibia Airports Company (NAC), which went to court to get an eviction order against SE Duty Free Trading.
He dismissed a counter-application by SE Duty Free Trading allowing the retailer to remain on the premises while it fights the decision to award a new five-year duty free concession to another company, Paragon Investment Holdings, after an open tender.
Paragon Investment Holdings, formed in April 2003, is a service and investment company specialising in marketing, advertising and hospitality and property development. It was founded by a well-known Namibian businessman Lazarus Jacobs.
SE Duty Free Trading’s lease expired at the end November, but it filed a case with the High Court asking for the award to be set aside.
Paragon won the bid ahead of SE Duty Free Trading and a third bidder United Africa. But SE Duty Free Trading Administrative and Financial Director Samson Kaulinge claimed his company’s offer was higher than both Paragon’s and United Africa’s.
The Namibian quoted Kaulinge saying that his company offered to pay Namibia Airports Company a monthly rental of N$270,900 (US$38,603) for the first year of the contract, increasing to N$396,625 (US$56,519) in year five, or 28% of turnover, whichever was higher.
The retailer had been formerly paying N$111,236 (US$15,851) a month or 8% of turnover, whichever was higher. The report said that Paragon offered to pay N$200,000 (US$28,500) a month in the first year of the concession, increasing to N$292,820 (US$41,727) in year five, or 18% of turnover, whichever was higher United Africa had tabled a monthly rental of N$180,000 (US$25,650), increasing to N$263,538 (US$37,554) in the final year, or 18% of sales.
SE Duty Free Trading based its calculations on estimated annual turnover of N$15.1 million (US$2.2 million) in the first year and N$24.4 million (US$3.5 million) in year five.
Namibia Airports Company opposed any interim extension as Paragon’s lease is starting on 1 February and it plans to use December and January to refurbish the shop. SE Duty Free Trading’s review application is expected to be heard in the High Court next year.
The Moodie Report is attempting to reach the relevant parties for the latest update.
