Government has this week terminated the awarding of a P28 million pula road tender to Emark (Pty) Ltd under dubious circumstances. The tender involves a works contract for resealing and road marking of Tshootsha – Mamuno road section II (40km).
The decision by government was taken last week following this publication’s revealing story that some government big shots were caught up in the controversial multimillion tender brawl. This comes after a contractor in the said tender Moira (Pty) Ltd raised the red flag over what they said are matters of clear malpractice and maladministration of government funds.
The termination of the contractor award barely follows government’s recent decision to reverse 4 billion worth tenders, in particular the immediate blacklisting of China Jiangsu International Botswana (Pty) Ltd, a subsidiary of China Jiangsu International – over alleged bribery claims (corrupt practices). In a separate confidential letter this week announcing the contract termination by government, dated 12 February 2019, the Roads department under Ministry of Transport and Communication notified Emark which was allocated the tender that “it is cancelled.”
A contractor that bid the said tender of reference no. MTC 240/55/2017-2018 had earlier pointed out some basic contractual contraventions between Public Procurement and Asset Disposal Board (PPADB), department of Roads and Emark, the contractor awarded. The matter also landed at the Office of the President (OP).
The cutting classified letter passed to WeekendPost and signed by Acting Director of Roads Reason Lekutlane states “we refer to the above tender and hereby cancel the tender aforesaid on your account of your failure to provide valid Performance Security Guarantee issued by a bank or Insurance Company contrary to the conditions of Old Mutual.” The Acting Director of Roads further observed that the purported Performance Security guarantee has been forged by the said company, Emark.
Lekutlane highlighted to the company that “the purported Performance Bond Guarantee as well as the Advance Payment Guarantee issued on a letter head of Old Mutual are said to be forgeries and therefore not valid according to the Portfolio Manager of Old Mutual.” “The contract is therefore cancelled immediately and forthwith by reason of the purported submission of fraudulent documents,” he stressed.
The fraudulent activity was also confirmed by Old Mutual Short Term Insurance (Botswana) Limited, Portfolio Manager Tshipinare Phele in another top secret letter to the Ministry of Transport and Communications and in particular Department of Roads. In his letter also dated 12 February 2019, Phele stated that “I would like to state and confirm that I, Tshipinare Gofaone Phele of I.D no. 090318617 working for Old Mutual Short-Term Insurance Botswana (OMSTIB), in my capacity as Portfolio Manager DID NOT sign, neither initial nor stamp any Performance Bond Guarantee/Surety document for the companies Mod’s services (Pty) Ltd and Emark Enterprises (Pty) Ltd, or for whichever company, pertaining to the Works Contracts of resealing and road marking of the stated roads tenders: tender no. MTC240/5/55/2017-2018(2).”
He further on stated that he does not even know the stated companies in question. “I would like to also state that I have no knowledge of the above stated companies, nor have I ever met and know their representatives. The signatures and handwritings are not mine, and so they were done fraudulently.” The Old Mutual official explained that the Old Mutual Short Term Insurance Botswana does not even offer the Performance Bond Guarantee cover hence they do not hold any form of cover/policy for the said companies.
He also revealed that “please also note that Old Mutual Shot Term Insurance Botswana went through rebranding and that we also changed our letterheads in and around September 2018, so as such there is no how I could have issued the letter in the old letterhead as in the Performance Bond Guarantee letters provided by December 2018.” Following the shadowy revelations, the mysterious termination of the tender also follows a recommendation from the Ministerial Tender Committee to the department of Roads.
“The Ministerial Tender Committee at its special sitting of the 12th February 2019, approved your recommendation for cancellation of contract and withdrawal of award of tender for reseal and road marking of Tshotsha – Mamuno road section II (40km) tender in respect of Emark (Pty) Ltd,” Chairperson of Ministerial Tender Committee (MTC) Maipelo Ragalase who is also the acting Deputy Permanent Secretary (Corporate Services) in the Ministry of Transport and Communication, stated in another letter.
In light of the termination of the contract, the department of Roads were also advised to “report this matter to the relevant authorities.” It is understood that through MTC Chairperson’s affidavit, there are certain matters of clear malpractice and maladministration of government funds which have been committed by both herself and the Director of Roads.
Chief among the irregularities, Kgotso Botlhole of Lekorwe Legal Consultants, on behalf of Moira (Pty) Ltd cited that: “first, the Director of Roads issued a notice of commencement handing over the site to Emark without first having received a performance bond giving security in favour of the government of Botswana for Emark’s performance of the works.”
He stressed that the letter of acceptance is dated 17 December 2018 while Emark issued a letter dated 14 January 2019 apparently attaching a performance bond only issued by Old Mutual two days later, and on 16 January 2019. The rushed letter is now reportedly said to have been forged.
According to Botlhole “Director of Roads, Modisa Segokgo, also authorized the occupation of site and the commencement of works by a civil contractor for the project (28 million pula) to be paid by the government, without first ensuring that security is furnished to the government for the performance of the contract by Emark.”
The Moira company attorney, the enterprise which lost the bid in the second position as they ran short of half a million to reach the 28 million mark, said therefore that “this is a clear act of unlawful maladministration inexplicably placing the government at an unnecessary and wholly avoidable fiscal risk. This behavior does not conform with the letter of acceptance, nor to any government standard practice (in tendering).”
Government is currently sitting on 4 400 vacant posts that remain unfilled in the civil service. This is notwithstanding the high unemployment rate in Botswana which has been exacerbated by the recent outbreak of the deadly COVID-19 pandemic.
Just before the burst of COVID-19, official data released by Statistics Botswana in January 2020, indicate that unemployment in Botswana has increased from 17.6 percent three years ago to 20.7 percent. “Unemployment rate went up by 3.1 percentage between the two periods, from 17.6 to 20.7 percent,” statistics point out.
Leading commercial bank, First National Bank Botswana (FNBB), expects the central bank to sharpen its monetary policy knife and cut the Bank Rate twice in the last quarter of 2020.
The bank expects a 25 basis point (bps) in the beginning of the last quarter, which is next month, and another shed by the same bps in December, making a total of 50 bps cut in the last quarter. According to the bank’s researchers, the central bank is now holding on to 4.25 percent for the time being pending for more informed data on the economic climate.
An audit of the accounts and records for the supply of food rations to the institutions in the Northern Region for the financial year-ended 31 March 2019 was carried out. According to Auditor General’s report and observations, there are weaknesses and shortcomings that were somehow addressed to the Accounting Officer for comments.
Auditor General, Pulane Letebele indicated on the report that, across all depots in the region that there had been instances where food items were short for periods ranging from 1 to 7 months in the institutions for a variety of reasons, including absence of regular contracts and supplier failures. The success of this programme is dependent on regular and reliable availability of the supplies to achieve its objective, the report said.
There would be instances where food items were returned from the feeding centers to the depots for reasons of spoilage or any other cause. In these cases, instances had been noted where these returns were not supported by any documentation, which could lead to these items being lost without trace.
The report further stressed that large quantities of various food items valued at over P772 thousand from different depots were damaged by rodents, and written off.Included in the write off were 13 538 (340ml) cartons of milk valued at P75 745. In this connection, the Auditor General says it is important that the warehouses be maintained to a standard where they would not be infested by rodents and other pests.
Still in the Northern region, the report noted that there is an outstanding matter relating to the supply of stewed steak (283×3.1kg cans) to the Maun depot which was allegedly defective. The steak had been supplied by Botswana Meat Commission to the depot in November 2016.
In March 2017 part of the consignment was reported to the supplier as defective, and was to be replaced. Even as there was no agreement reached between the parties regarding replacement, in 51 October 2018 the items in question were disposed of by destruction. This disposal represented a loss as the whole consignment had been paid for, according to the report.
“In my view, the loss resulted directly from failure by the depot managers to deal with the matter immediately upon receipt of the consignment and detection of the defects. Audit inspections during visits to Selibe Phikwe, Maun, Shakawe, Ghanzi and Francistown depots had raised a number of observations on points of detail related to the maintenance of records, reconciliations of stocks and related matters, which I drew to the attention of the Accounting Officer for comments,” Letebele said in her report.
In the Southern region, a scrutiny of the records for the control of stocks of food items in the Southern Region had indicated intermittent shortages of the various items, principally Tsabana, Malutu, Sunflower Oil and Milk which was mainly due to absence of subsisting contracts for the supply of these items.
“The contract for the supply of Tsabana to all depots expired in September 2018 and was not replaced by a substantive contract. The supplier contracts for these stocks should be so managed that the expiry of one contract is immediately followed by the commencement of the next.”
Suppliers who had been contracted to supply foodstuffs had failed to do so and no timely action had been taken to redress the situation to ensure continuity of supply of the food items, the report noted.
In one case, the report highlighted that the supplier was to manufacture and supply 1 136 metric tonnes of Malutu for a 4-months period from March 2019 to June 2019, but had been unable to honour the obligation. The situation was relieved by inter-depot transfers, at additional cost in transportation and subsistence expenses.
In another case, the contract was for the supply of Sunflower Oil to Mabutsane, where the supplier had also failed to deliver. Examination of the Molepolole depot Food Issues Register had indicated a number of instances where food items consigned to the various feeding centres had been returned for a variety of reasons, including food item available; no storage space; and in other cases the whole consignments were returned, and reasons not stated.
This is an indication of lack of proper management and monitoring of the affairs of the depot, which could result in losses from frequent movements of the food items concerned.The maintenance of accounting records in the region, typically in Letlhakeng, Tsabong, and Mabutsane was less than satisfactory, according to Auditor General’s report.
In these depots a number of instances had been noted where receipts and issues had not been recorded over long periods, resulting in incorrect balances reflected in the accounting records. This is a serious weakness which could lead to or result in losses without trace or detection, and is a contravention of Supplies Regulations and Procedures, Letebele said.
Similarly, consignments of a total of 892 bags of Malutu and 3 bags of beans from Tsabong depot to different feeding centres had not been received in those centres, and are considered lost. These are also not reflected in the Statement of Losses in the Annual Statements of Accounts for the same periods.