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National Assembly

Debate No 10 of 2004


 
AIR MAURITIUS/IMMEDIA/BLACKBURN ROVERS - AGREEMENT
The Leader of the Opposition (Dr. N. Ramgoolam)(By Private Notice) asked the Prime Minister, Minister of Defence and Home Affairs whether, with respect to the agreement of 03 November 2003 between Air Mauritius and Immedia, he will, for the benefit of the House, obtain information as to -
(a) the date it was approved by the Board of Air Mauritius;
(b) the reasons why Immedia was brought into the deal and the agreement not concluded directly between Air Mauritius and Blackburn Rovers;
(c) the consideration of the contract in cash and in kind to Immedia, and
(d) whether tickets given by Air Mauritius are for the exclusive use of Blackburn Rovers.
The Prime Minister: Mr Speaker Sir, I wish to repeat what the Ag. Prime Minister stated in the House on 27 April 2004 in reply to PQ B/274 regarding Air Mauritius. He had pointed out that Air Mauritius is a Public Company incorporated in Mauritius under the Companies Act and listed at the Stock Exchange and is, therefore, bound by the provisions of the Companies Act, the Stock Exchange Act and the Company's Memorandum and Articles of Association. However, exceptionally, I am providing the information requested in the Private Notice Question.
I am informed that in August 2003, the Mauritius Tourism Promotion Authority (MTPA), in its efforts to promote Mauritius as a tourist destination, advised Air Mauritius that, on an initiative of Immedia, a very good deal had been secured with Blackburn Rovers, a major football club playing in the Premier League in the UK. The MTPA considered that it was a unique opportunity to building the name and image of Mauritius in the UK, which is reckoned as a most promising long haul market. The MTPA considered that it would create linkage of friends of Mauritius comprising VIPs, celebrities and foreign football players.
Air Mauritius agreed to participate in the venture and extended its full support by offering aircraft seats, which would otherwise have remained unutilised in low season.
A transport/service contract was signed between Air Mauritius and Immedia on 06 November 2003. During the football season from August 2003 to May 2004 Blackburn Rovers, through Immedia, was to provide, inter alia the following -
(a) the right to Air Mauritius to use Blackburn Rovers Football Club with various standard advertising facilities and opportunities, including -
(i) full page advertisement in all home match programmes valued at £ 6,500;
(ii) Eight fixed billboards on the football ground in TV positions, valued at £ 80,000;
(iii) Six concourse poster sites valued at £ 3,000;
(iv) animated advert as giant video screen valued at £ 13,400;
(v) website exposure valued at £ 5,000, and
(vi) exposure on media wall backdrops during Manager/Player TV interviews, estimated at £ 80,000.
In return Air Mauritius agreed to provide Blackburn Rovers with 36 first class tickets and 48 business class tickets. The commercial value represents a total of £ 136,000.
However, the tickets to be issued were to be drawn from unutilised seats on Air Mauritius flights. The Airline thus recovers empty seats of no commercial value for barter against specific value, which is - I am told - a common practice in the Airline industry.
Air Mauritius is satisfied that it has received far greater value that what it has paid for.
Discussions for the contract took place in August 2003 with various stakeholders and MTPA in particular, under the previous Management of Air Mauritius. But it was fine-tuned and signed in November 2003 after the new Management felt that it represented good value and taking into account the fact that there was need to advertise Mauritius more aggressively on the UK Market and beyond.
The results, Mr Speaker, have yet to be fully assessed, but already traffic of tourists from UK to Mauritius grew by an exceptional 13.1% against a backdrop of general decline in international travel following the Iraq war and the outbreak of SARS.
Air Mauritius would certainly have preferred more famous clubs to sponsor but the costs, I am told, can be absolutely prohibitive.
The mode of publicising the country and the airline to induce greater inflow of tourists require a variety and diversity of advertising and marketing measures.
In conjunction with MTPA and other stakeholders of the tourism industry, Air Mauritius will continue to evaluate every reasonable opportunity to promote Mauritius by making judicious use of unsold aircraft seats, which is a most perishable product. It intends to continue to engage itself in such agreements, as it may consider commercially beneficial.
Mr Speaker, Sir, I am informed that this matter falls within the ambit of the day-to-day commercial operations of Air Mauritius as a commercial airline and, like many other commercial activities, does not require the specific approval of its Board of Directors.
As regards part (b) of the question, this was a commercial initiative conceived by Immedia and proposed by the latter to MTPA, which passed it on to Air Mauritius.
As regards part (c), there was no consideration or payment in cash. But, as I have indicated earlier, Air Mauritius agreed to provide 36 first class and 48 business class tickets on the London/Mauritius/London route, to be utilised during the off-peak period.
As far as part (d) is concerned, Immedia is under an obligation to provide Air Mauritius with the names of celebrities, jointly selected by itself with MTPA, who would be the beneficiaries of the tickets.
Dr. Ramgoolam: Mr Speaker, the hon. Prime Minister has quoted figures for the tickets worth £136,000, roughly Rs6.8 m. Can I ask him whether such a big sum did not need approval of the Board of Air Mauritius? I want clarification on this.
The Prime Minister: I have just said that I am informed that at Air Mauritius and under the Companies Act this matter falls within the ambit of the day to day commercial operation of Air Mauritius as a commercial airline. I checked with the Chairperson, Dr. Suddhoo, who is totally happy with the situation.
(Interruptions)
Mr Speaker: Order! Order, please!
The Prime Minister: On the Board of Air Mauritius we have also the Solicitor General, a most respected lawyer, and I have checked with him also. He is fully satisfied that there was no need to go to the Board of Directors. We have many very respectable and responsible persons on the Board of Air Mauritius, Mr Speaker, Sir.
Dr. Ramgoolam: I heard the hon. Prime Minister talk about Mr Suddhoo and the Solicitor General. But what about the Managing Director? Is he happy with that as well?
The Prime Minister: Of course! The Managing Director took the decision with his staff. The question is whether there was need to go to the Board. Of course, the Managing Directors says there was no need to go and the Board agrees. As I have said, I have talked to the Chairperson, to the Solicitor General and it is perfectly in order.
Dr. Ramgoolam: The hon. Prime Minister did not mention that the Managing Director was happy and the contract was not signed by him.
The Prime Minister: Can the hon. Leader of Opposition put the question instead of passing a remark en passant? If he asks a question, I will tell him.
Dr. Ramgoolam: The hon. Prime Minister said that the Managing Director is quite happy. But the Prime Minister did not mention that he was quite happy when he answered the question nor did he sign the document. That is why I am saying it.
The Prime Minister: If the hon. Leader of the Opposition asks, I will make him happy!
Dr. Ramgoolam: That is why I ask!
(Interruptions)
I see that the chemistry with Bush has worked! I see the arrogance is still there! The Prime Minister learned from Bush.
(Interruptions)
The hon. Prime Minister should not worry, I am cooler than he is! The hon. Prime Minister said that the contract was signed on 06 November and it was effective on 01 September. Is there any reason for that?
The Prime Minister: As I said, it was an idea that surfaced under the previous management of Air Mauritius. It was fine-tuned; the new management came in, completed the fine-tuning. The new management in which we have complete confidence was totally satisfied and went ahead with what had been initiated before.
I must say from the information I have that this is perfectly straightforward to the advantage of Air Mauritius and Mauritius. It is perfectly straightforward and everything has been done in order.
(Interruptions)
Mr Speaker: Before it goes out of hand, I am warning hon. David not to interrupt or make any comments from a sitting position. I want you to strictly comply with the Standing Orders.
(Interruptions)
I just said that I do not want any comment either from the Ministers or any other Member.
Dr. Ramgoolam: The hon. Prime Minister said that they started negotiating in August and it was fine-tuned. He said also that the contract was signed on 06 November 2003. It is from that date that the contract became valid. Why has it been made retroactive as from 01 September. Has there been any past consideration? That is what I need to know.
The Prime Minister: The information that I have is that it is straightforward, as I said. I am informed by Air Mauritius that the validity of the agreement is from 01 September 2003 to 31 August 2004.
Dr. Ramgoolam: Has there been any past consideration before 06 November 2003?
The Prime Minister: As I said, the information I have is that the validity of the agreement runs from 01 September 2003 to 31 August 2004.
Dr. Ramgoolam: Can the hon. Prime Minister tell us whether an international carrier like Air Mauritius with a track record that it has, had to go through a third party for signing such a contract.
The Prime Minister: As I said, the idea emanated from Immeida which discussed it with MTPA. The MTPA was very excited and passed it on to Air Mauritius. I understand it was Immedia that was in contact with the football club concerned. Therefore, on behalf of the football club concerned a contract was signed between Immedia and Air Mauritius. I am no expert in that field, but I am informed that this is perfectly in order. I trust the Chairperson, the Chief Executive of Air Mauritius. They are doing a great job. As I said, this is straightforward. This is absolutely in order.
Dr. Ramgoolam: Can the Prime Minister confirm whether in the past there has been such an agreement with an English football team?
The Prime Minister: I do not know. If a question is put I will give the information.
Dr. Ramgoolam: I thought the Prime Minister would have looked into it because he said that he was totally satisfied and that it is in order.
(Interruptions)
The Prime Minister: I am satisfied with the present agreement.
Dr. Ramgoolam: The hon. Prime Minister is satisfied because his own people are getting the contract, people from the MMM! That is why he is satisfied. If the hon. Prime Minister cannot confirm it, I am telling him that there was such a contract before …
The Prime Minister: The Leader of the Opposition can put a question, but he cannot come in with information like that, Mr Speaker, Sir.
Dr. Ramgoolam: The hon. Prime Minister said that he does not know the answer. Will he confirm that such a deal was made with an English team in the past without going through a third party?
(Interruptions)
The Prime Minister: I have said, Mr Speaker, that I am not aware of any previous agreement and that if a question is put, I will reply. Mr Speaker, being given the very unfair remark that has been made, Immedia is recognised as one of the best performing public advertising companies. It has won many awards. I repeat that this is perfectly in order. There has been absolutely nothing that should not have been done that has been done, Mr Speaker.
Mr Duval: Mr Speaker, the hon. Prime Minister mentioned that only unsold tickets are to be made available to Blackburn Rovers. If that is correct, would he like to point the section of the contract that mentions that only unsold tickets will be made available to Blackburn Rovers?
The Prime Minister: Mr Speaker, this is what I have been informed by Air Mauritius. I do not rely, like the hon. Member, on a paper in his hands, on the rubbish published weekly in 'Hebdo'.
Mr Duval: The Prime Minister has to inform the House properly. It appears that there is no provision that only unsold tickets be provided to Blackburn Rovers. Perhaps the Prime Minister can seek the information or come back later and tell us whether this is a fact. It has been stated by the Prime Minister that this is so.
The Prime Minister: Mr Speaker, I think the Member should listen instead of reading 'Hebdo' or such rubbish. I said in nearly every paragraph: 'I am informed by Air Mauritius that', 'I have been informed by Air Mauritius that only unsold tickets are involved'.
Mr Duval: The Prime Minister has gone into the trouble of speaking to the Solicitor-General. Has he not read the contract before answering the question in the House?
The Prime Minister: No, I have not read it, Mr Speaker. I said this is a company registered under the Companies Act. I am not going to interfere into the day to day commercial doings of that company. As I said, the Board
of Air Mauritius is a totally respectable Board now unlike in the past when others were in Government, Mr Speaker, Sir. Air Mauritius has been cleaned. We are cleaning Air Mauritius as usual.
(Interruptions)
Mr Speaker: Order, please!
The Prime Minister: This is not a Labour Government, Mr Speaker, Sir! The Board is above board and doing its work.
Dr. Boolell: Mr Speaker, Sir, would the Prime Minister state who is the Director of Immedia?
The Prime Minister: I am not sure, but I think that it is Mr Rama Poonoosamy.
Dr. Boolell: The Prime Minister thinks that it is Mr Rama Poonoosamy! And whichever Board it is has awarded a contract to a member of his political party! Is this what transparency is all about?
(Interruptions)
Mr Speaker: Order! Put your question, please!
The Prime Minister: Mr Speaker, Sir, I repeat what has been said. Immedia is recognised as being one of the best firms in the business of advertising, public relations, etc. I don't have in mind the list of 1st class awards that it has won over the past, but it is recognised to be as such. Immedia, Mr Rama Poonoosamy, do straight business. They get a contract when they deserve a contract. There has been no interference, no ingérence, unlike under the previous Government, Mr Speaker, Sir.
(Interruptions)
Dr. Boolell: Mr Speaker, Sir, in the name of transparency, would the Prime Minister state who are the shareholders of Air Mauritius? The public is the shareholder of Air Mauritius! The nation is the shareholder of Air Mauritius, Mr Speaker, Sir!
Mr Speaker: You have put a question, hon. Dr. Boolell. Listen to the reply, please.
Dr. Boolell: Can I ask the Prime Minister…
(Interruptions)
Mr Speaker: Order! You have asked a question. Let's listen to the reply.
The Prime Minister: The shareholding of Air Mauritius is available at the Registrar of Companies.
Dr. Boolell: It is members of the public who are the shareholders of this public company listed on the Stock Exchange.
Mr Speaker: Put your question, please.
Dr. Boolell: Can I ask the Prime Minister whether there has been better commercial initiative from other commercial groups?
The Prime Minister: I replied that the former management of Air Mauritius found that a very valuable deal. The new management examined and found it to be such and, therefore, confirmed the agreement that was about to be reached. It is to the advantage of Air Mauritius and the tourism sector of Mauritius.
Dr. Boolell: Why is it that, when it concerns other commercial groups, the approval of the Board is sought, and when it comes to Immedia there is no approval from the Board? Why this politique of deux poids deux mesures, Mr Speaker, Sir?
The Prime Minister: There is no politique of deux poids deux mesures, Mr Speaker, Sir. I repeat what I have said. The Board of Air Mauritius is now composed of respected and respectable personalities, including Dr. Sudhoo, a well-respected professional, the Solicitor-General, who is the legal adviser to Government. I am advised by the Solicitor-General and the Chairperson that this is perfectly in order.
Dr. David: Mr Speaker, Sir, will the Prime Minister tell us whether, before Air Mauritius entered into agreement with Immedia, it found out if there were other better deals from other companies?
The Prime Minister: Of course, it must have. I am not aware, but I am sure it must have looked for the best deal from whatever quarters, including Labour supporters who are in business, Mr Speaker, Sir. On the other side also, people close to the Labour Party are in business and do genuine, straightforward business. It is totally unhealthy for the Labour Party to give the impression that everybody doing business is doing dirty business. This is shameful. Certain practices of the past are no longer there, but the Labour Party, in Opposition, should refrain from giving the impression that everybody doing business is doing dirty business. This is not the case, Mr Speaker, Sir. There are people close to us and there are people close to them who do straightforward business, Mr Speaker, Sir.
Dr. Ramgoolam: Mr Speaker, Sir, I challenge the Prime Minister…
(Interruptions)
I challenge the Prime Minister…
The Prime Minister: On a point of order, Mr Speaker, Sir. The Leader of the Opposition cannot use that kind of language.
Dr. Ramgoolam: I can challenge you if I want to! I challenge the…
Mr Speaker: My predecessors have, since years, condemned the use of words such as ‘challenge' and the practice of one Member challenging another Member of the House. I also think it is not in order. You can use other words. You cannot challenge a Member of the House!
Dr. Ramgoolam: May I ask the Prime Minister, then. The Labour Party has never said that people cannot do business. What we are saying is that some five families in this country cannot take all the businesses of this country. That's what we are saying! They should stop doing their propaganda in Parliament! The Prime Minister is now praising the Solicitor General. Is it not the same Solicitor General whose advice was disregarded in the Illovo deal?
The Prime Minister: Mr Speaker, Sir, this is completely another matter. But, I am sure that Mr Rama Poonoosamy will be very excited to find that he is placed by the Labour Party dans les cinq familles!
Dr. Ramgoolam: Is it not the same Solicitor-General whose advice was disregarded in the Illovo deal? That is the question!
(Interruptions)
Mr Speaker: Order!
Dr. Boolell: Why is it that, in the past, there was a better commercial initiative, without going through a third party, between Air Mauritius and Arsenal Football Club, which was a better deal in respect of advertisement?
The Prime Minister: Mr Speaker, Sir, the information I have from the Chief Executive and the Chairperson is that the deal, offered through MTPA by Immedia, was a very good one, to the advantage of Air Mauritius and the tourism sector of Mauritius. It was, therefore, finalised.
Mr Duval: In the name of transparency and being given that we are dealing with a company very close to Government, does not the Prime Minister think that it would have been better that this deal should have been - and ought to have been - and should now also, be ratified by the full Board of Air Mauritius, given what has happened in the past in that particular company?
The Prime Minister: Mr Speaker, Sir, I have said that I have received legal advice from no less a person than the Solicitor-General, that this was perfectly in order. But, as Prime Minister, I have absolutely no problem that the Chairperson should bring that to the Board of Air Mauritius if he finds it fit, and if there is a request for it. I repeat: after I received the PNQ, I talked to the Chairperson, Dr. Sudhoo; I talked, of course, to the Chief Executive; I talked to the Solicitor-General, who sits on the Board. We have no problem with that. I am sure that, if they feel that it should be brought to the notice of Board, it will be.
Dr. Jeetah: Mr Speaker, Sir, I would like to ask a very easy question.
(Interruptions)
Mr Speaker: Order!
Dr. Jeetah: Mr Speaker, Sir, do I have the floor?
(Interruptions)
Mr Speaker: Order, please! Order!
Dr. Jeetah: Mr Speaker, Sir…
(Interruptions)
Mr Speaker: Order!
Dr. Jeetah: Mr Speaker, Sir, the hon. Prime Minister mentioned that it was a very good deal. I would like to know how good this deal was for Immedia.
The Prime Minister: It was certainly good business for Immedia. I don't know of any private sector firm that is not for making reasonable profit. I repeat what I said. They make as if all business is dirty business. No, Mr Speaker, Sir! In that case, I repeat what I said, namely that Immedia is one of the most respected firms having won I don't know how many awards, and this was a perfectly straightforward business deal.
Dr. Boolell: Then, is this the reason why there have been vehement protests from other advertising groups, except that they cannot be vocal for
the reason that they are going to be taken and penalised by this Government? This is a fact, Mr Speaker, Sir!
The Prime Minister: I see no protest from other…
(Interruptions)
Can he shut up, please, Mr Speaker, Sir? You have ordered them to keep quiet from a sitting position. Mr Speaker, Sir, I am not aware of any protest from any other advertising group. But, in that business, as in any other business, whenever there is a contract, whenever there is an agreement – and now, in the ICT sector, more than anywhere else - those who don't strike a good deal will always find something to say. But, as Prime Minister, I would be keen to receive the representations of any business in that sector that feels that it has not been treated well.
Dr. Boolell: Mr Speaker, Sir, it is precisely because the business is fishy and those companies are scared of Government, because of reprisal that can be taken against them. I would like to know whether the Prime Minister would recommend that this deal be approved by the Board, as has been suggested by hon. Duval.
The Prime Minister: I have already replied, Mr Speaker, Sir. Air Mauritius is a company under the Companies Act. It has a Board of Directors and it is one of our best companies. Government has absolutely no objection, as I said a few minutes ago, should the Chairperson or the Board wish to have a look at this. We have absolutely no problem.
Dr. Ramgoolam: The Prime Minister says that he does not interfere with matters which is for the Board of Air Mauritius to consider. Why, then, did he go to visit Boeing in Seattle? Why did he do that, if he does not interfere?
The Prime Minister: Mr Speaker, Sir, everybody knows…
Mr Speaker: This supplementary question is not relevant to the question put by the hon. Leader of the Opposition. This has no connection with the contract.
(Interruptions)
Order, please! This question concerns the contract which has been entered by Air Mauritius with Immedia. It has nothing to do with Boeing.
Dr. Ramgoolam: Can I ask the Prime Minister whether he can say if Mr Poonoosamy is also the PR agent for Boeing?
The Prime Minister: I am not aware of that at all. No one has mentioned that to me. I have no information to that effect, Mr Speaker, Sir.
Dr. Ramgoolam: Since he has stated that there is no connection with that and Boeing, can he say why did he go and visit it?
The Prime Minister: I have not said that there is no connection. I have said that as far as I am aware there is absolutely no connection; and Boeing or anybody else has never put that information forward. That's all I said. I did not say as a fact; I said that all information I have, is concerned, this is not the case.
Mr Speaker: Two last minutes for PNQ.
Dr. David: Mr Speaker, Sir, will the hon. Prime Minister tell us why MTPA acted as a broker courtier for Immedia?
The Prime Minister: MTPA is there, funded by public money to promote ….
(Interruptions)
If he cannot keep quiet, Mr Speaker, Sir, he does not deserve an answer!
(Interruptions)
Mr Duval: Mr Speaker, Sir, coming back to the independence of the Board and that fact that it is a company under the Companies Act etc. may I ask the hon. Prime Minister why he felt it necessary and for what purpose he has visited the Boeing premises and whether this is in connection ….
Mr Speaker: This is not relevant.
Dr. Ramgoolam: Can the hon. Prime Minister give a guarantee to the House that those tickets that Immedia has got to the value of Rs6.8 m or whatever will not be used to carry celebrities for its own show here in Mauritius?
The Prime Minister: I am sure the Chief Executive, the Chairperson of Air Mauritius will read carefully the replies to the PNQ of today and will check. If there is any fishy business anywhere, Air Mauritius will take the necessary action. Again, I repeat, I have no information to that effect at all.
Dr. Ramgoolam: How will we know what celebrities are chosen by Immedia? Do we know?
The Prime Minister: I'll re-read the last paragraph, Mr Speaker, Sir. I said: "As far as part (d) is concerned, Immedia is under an obligation to provide Air Mauritius with the names of celebrities jointly selected by itself with MTPA would be the beneficiaries of the ticket". So, what we are informed is that MTPA and Immedia meet, discuss, come to an agreement on the names of the celebrities to be invited.
Dr. Ramgoolam: Can he say whether there is a signed agreement between Immedia and MTPA?
The Prime Minister: I am not aware of that.
Dr. Ramgoolam: If there were a signed agreement, would the Prime Minister be agreeable to table it?
The Prime Minister: I can check and report, but I am not going to table. I repeat there is a limit that Government is going to go where public companies registered under the Companies Act quoted on the stock exchange are concerned. There must be a limit. I have given all the information that I have been provided with by Air Mauritius. I have checked with Air Mauritius and I am providing the information requested.
Dr. Ramgoolam: I thank the Prime Minister for this. I am in agreement with the fact that we have to make sure that we do not damage any public company, but that is not commercially sensitive. If he checks it, I am satisfied with it and he does not have to table it. But will he also check what happened in the past with that English team? Why was there no firm similar to Immedia which made the deal in the past between the English team with Air Mauritius? How is it that it is this time that it was thought that Immedia should be brought into that deal?
The Prime Minister: I can do that and report back, but I remind the hon. Leader of the Opposition what I said informed by Air Mauritius earlier on. Air Mauritius would certainly have preferred more famous clubs than Blackburn Rovers to sponsor, but the cost can be absolutely prohibitive. I suppose the joyful part of it is that on Saturday 01, the President of the Republic was present on the occasion of a match between Blackburn Rovers which is defined as a less famous club against Manchester United and beat Manchester United in the presence of the President of the Republic.