Govt terminates Yan Xie’s convention centre contract
THE government and controversial Chinese businessman Yan Xie’s J & M Properties company have reached an out of court settlement to terminate the latter’s contract to operate the Manthabiseng Convention Centre.
In terms of that agreement, which was endorsed by Justice Molefi Makara on Friday, J & M Properties will cease operating the convention centre on behalf of the Ministry of Tourism, Environment and Culture in October 2020. The ministry will then assume the responsibility of running the facility on behalf of the government.
J & M Properties was on 26 February 2018 awarded a five-year contract to operate the convention centre on behalf of the tourism ministry by the previous government headed by Thomas Thabane.
However, following the May 2020 collapse of the Thabane regime, the new Moeketsi Majoro-led government baulked at paying J & M Properties M53 000 per day for renting the centre as the headquarters of the National Covid-19 Secretariat (NACOSEC).
J & M Properties collect another M73 504 on a monthly basis from other tenants. It is not clear why the government was being charged a whooping M53 000 per day as rent for NACOSEC.
The tourism ministry had since resolved to reclaim the centre from J & M Properties and run it on its own. The ministry had initially resolved to kick out J & M Properties from 6 August 2020.
J & M Properties then filed a High Court application on Thursday to stop the government from terminating the contract.
Tourism ministry principal secretary, Moliehi Ntene, the tourism ministry and the Attorney General Advocate Haae Phoofolo were the first to third respondents in the application respectively.
According to its court papers, J & M Properties said it stood to lose about M1, 8 million if the contract was terminated before its due date in 2023.
“I aver that the applicant (J & M Properties) stands to lose M73 504 in monthly revenue if the honourable court does not intervene to interdict the respondents from effecting the termination of the sub-lease agreement.
The applicant stands to lose some M1 766 575.50 in revenue if the agreement is terminated before February 2023,” J & M Properties managing director, Bernard Ntaote stated in his affidavit.
J & M Properties lawyer, Adv Tšeliso Fiee argued that “the first and second respondents (Ms Ntene and the Tourism ministry) have no valid reason for terminating the agreement between the parties”.
“The applicant has sub-tenants who generate revenue for the applicant in excess of M70 000 per month. The applicant will be prejudiced if it were to lose its subtenants due to the purported termination when the respondents do not have valid grounds for terminating the agreement,” Adv Fiee argued.
The parties eventually met on Thursday, the same day the application was filed, and agreed an out of court settlement giving J & M Properties two-months’ notice to handover the running of the convention centre to the Tourism ministry.
The agreement was endorsed on Friday morning by Justice Makara.
However, in the agreement there was no mention of the M4 million which J & M Properties says it is owed by government as rent for the use of the centre by NACOSEC.
The Sunday Express saw an invoice from J & M Properties to the cabinet office demanding M4 081 000 for NACOSEC’s occupation of the convention centre from 15 March to 31 May 2020.
According to the invoice, J & M Properties charged the government M53 000 per day for NACOSEC’s occupation of the convention centre.
Tourism Minister Lekhetho Rakuoane yesterday told this publication that the government would not pay the M4 million.
“We would rather negotiate to compensate J & M Properties for their operational costs such as electricity and water bills.
“The Ministry of Tourism is responsible for the convention centre and it has resolved to run the convention centre as it used to do before John (Yan Xie) was awarded the contract to run it.
“The two months’ notice will give J & M Properties ample time to remove their property and handover the facility to the government. It will also allow us to establish a team of civil servants to run the centre on behalf of the ministry,” Adv Rakuoane said.