Gov’t terminates P28 million unscrupulous tender
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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).”
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FaR property assets value clock P1.47 billion
FaR Property Company (FPC) Limited, a property investment company listed on the Botswana Stock Exchange, has recently announced its exceptional financial results for the year 2023. The company’s property asset value has risen to P1.47 billion, up from P1.42 billion in the previous year.
FPC has a diverse portfolio of properties, including retail, commercial, industrial, and residential properties in Botswana, South Africa, and Zambia. The company owns a total of 186 properties, generating rental revenues from various sectors. In 2023, the company recorded rental revenues of P11 million from residential properties, P62 million from industrial properties, and P89 million from commercial properties. Overall, the company’s total revenues increased by 9% to P153 million, while profit before tax increased by 22% to P136 million, and operating profit increased by 11% to P139 million.
One notable achievement for FPC is the low vacancy rate across its properties, which stands at only 6%. This is particularly impressive considering the challenging trading environment. The company attributes this success to effective lease management and the leasing of previously vacant properties in South Africa. FPC’s management expressed satisfaction with the results, highlighting the resilience of the company in the face of ongoing macroeconomic challenges.
The increase in profit before tax can be attributed to both an increase in income and effective control of operating expenses. FPC managed to achieve these results with fewer employees, demonstrating the company’s efficiency. The headline earnings per linked unit also saw an improvement, reaching 26.92 thebe, higher than the previous year.
Looking ahead, FPC remains confident in its competitiveness and growth prospects. The company possesses a substantial land bank, which it plans to develop strategically as opportunities arise. FPC aims for managed growth, focusing on consumer-driven developments and ensuring the presence of supportive tenants. By maintaining this approach, the company believes it can sustainably grow its property portfolio and remain competitive in the market.
In terms of the macroeconomic environment, FPC noted that inflation rates are decreasing towards the 3% to 6% range approved by the Bank of Botswana. This is positive news for the company, as it hopes for further decreases in interest rates. However, the fluctuating fuel prices, influenced by global events such as the war in Ukraine and oil output reductions by Russia and other Middle Eastern countries, continue to impact businesses, including some of FPC’s tenants.
FPC’s property portfolio includes notable assets such as a shopping mall in Francistown with Choppies Hyper as the anchor tenant, Borogo Mall located on the A33 main road near the Kazungula ferry crossing, and various industrial and commercial properties in Gaborone leased to Choppies, Senn Foods, and Clover Botswana. The company also owns a shopping mall in Mafikeng and Rustenburg in South Africa.
The majority of FPC’s properties, 85%, are located in Botswana, followed by 12% in South Africa and 3% in Zambia. With its strong financial performance, competitive position, and strategic land bank, FPC is well-positioned for continued growth and success in the property market.
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BPC Signs PPA with Sekaname Energy
The Botswana Power Corporation (BPC) has taken a significant step towards diversifying its energy mix by signing a power purchase agreement with Sekaname Energy for the production of power from coal bed methane in Mmashoro village. This agreement marks a major milestone for the energy sector in Botswana as the country transitions from a coal-fired power generation system to a new energy mix comprising coal, gas, solar, and wind.
The CEO of BPC, David Kgoboko, explained that the Power Purchase Agreement is for a 6MW coal bed methane proof of concept project to be developed around Mmashoro village. This project aligns with BPC’s strategic initiatives to increase the proportion of low-carbon power generation sources and renewable energy in the energy mix. The use of coal bed methane for power generation is an exciting development as it provides a hybrid solution with non-dispatchable sources of generation like solar PV. Without flexible base-load generation, the deployment of non-dispatchable solar PV generation would be limited.
Kgoboko emphasized that BPC is committed to enabling the development of a gas supply industry in Botswana. Sekaname Energy, along with other players in the coal bed methane exploration business, is a key and strategic partner for BPC. The successful development of a gas supply industry will enable the realization of a secure and sustainable energy mix for the country.
The Minister of Minerals & Energy, Lefoko Moagi, expressed his support for the initiative by the private sector to develop a gas industry in Botswana. The country has abundant coal reserves, and the government fully supports the commercial extraction of coal bed methane gas for power generation. The government guarantees that BPC will purchase the generated electricity at reasonable tariffs, providing cash flow to the developers and enabling them to raise equity and debt funding for gas extraction development.
Moagi highlighted the benefits of developing a gas supply industry, including diversified primary energy sources, economic diversification, import substitution, and employment creation. He commended Sekaname Energy for undertaking a pilot project to prove the commercial viability of extracting coal bed methane for power generation. If successful, this initiative would unlock the potential of a gas production industry in Botswana.
Sekaname Energy CEO, Peter Mmusi, emphasized the multiple uses of natural gas and its potential to uplift Botswana’s economy. In addition to power generation, natural gas can be used for gas-to-liquids, compressed natural gas, and fertilizer production. Mmusi revealed that Sekaname has already invested $57 million in exploration and infrastructure throughout its resource area. The company plans to spend another $10-15 million for the initial 6MW project and aims to invest over $500 million in the future for a 90MW power plant. Sekaname’s goal is to assist BPC in becoming a net exporter of power within the region and to contribute to Botswana’s transition to cleaner energy production.
In conclusion, the power purchase agreement between BPC and Sekaname Energy for the production of power from coal bed methane in Mmashoro village is a significant step towards diversifying Botswana’s energy mix. This project aligns with BPC’s strategic initiatives to increase the proportion of low-carbon power generation sources and renewable energy. The government’s support for the development of a gas supply industry and the commercial extraction of coal bed methane will bring numerous benefits to the country, including economic diversification, import substitution, and employment creation. With the potential to become a net exporter of power and a cleaner energy producer, Botswana is poised to make significant strides in its energy sector.
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UDC deadlock: Boko, Ndaba, Reatile meet Â
It is not clear as to when, but before taking a festive break in few weeks’ time UDC leaders would have convened to address the ongoing deadlock surrounding constituency allocation in the negotiations for the 2024 elections. The leaders, Duma Boko of the UDC, Mephato Reggie Reatile of the BPF, and Ndaba Gaolathe of the AP, are expected to meet and discuss critical matters and engage in dialogue regarding the contested constituencies.
The negotiations hit a stalemate when it came to allocating constituencies, prompting the need for the leaders to intervene. Representatives from the UDC, AP, and BPF were tasked with negotiating the allocation, with Dr. Patrick Molotsi and Dr. Philip Bulawa representing the UDC, and Dr. Phenyo Butale and Wynter Mmolotsi representing the AP.
The leaders’ meeting is crucial in resolving the contentious issue of constituency allocation, which has caused tension among UDC members and potential candidates for the 2024 elections. After reaching an agreement, the leaders will engage with the members of each constituency to gauge their opinions and ensure that the decisions made are favored by the rank and file. This approach aims to avoid unnecessary costs and conflicts during the general elections.
One of the main points of contention is the allocation of Molepolole South, which the BNF is adamant about obtaining. In the 2019 elections, the UDC was the runner-up in Molepolole South, securing the second position in seven out of eight wards. Other contested constituencies include Metsimotlhabe, Kgatleng East and West, Mmadinare, Francistown East, Shashe West, Boteti East, and Lerala Maunatlala.
The criteria used for constituency allocation have also become a point of dispute among the UDC member parties. The issue of incumbency is particularly contentious, as the criterion for constituency allocation suggests that current holders of UDC’s council and parliamentary seats should be given priority for re-election without undergoing primary elections. Disadvantaged parties argue that this approach limits democratic competition and hinders the emergence of potentially more capable candidates.
Another disputed criterion is the allocation based on the strength and popularity of a party in specific areas. Parties argue that this is a subjective criterion that leads to disputes and favoritism, as clear metrics for strength and visibility cannot be defined. The BNF, in particular, questions the demands of the new entrants, the BPF and AP, as they lack a traceable track record to support their high expectations.
The unity and cohesion of the UDC are at stake, with the BPF and AP expressing dissatisfaction and considering withdrawing from the negotiations. Therefore, it is crucial for the leaders to expedite their meeting and find a resolution to these disputes.
In the midst of these negotiations, the BNF has already secured 15 constituencies within the UDC coalition. While the negotiations are still ongoing, BNF Chairman Dr. Molotsi revealed that they have traditionally held these constituencies and are expecting to add more to their tally. The constituencies include Gantsi North, Gantsi South, Kgalagadi North, Kgalagadi South, Good Hope – Mmathethe, Kanye North, Kanye South, Lobatse, Molepolole North, Gaborone South, Gaborone North, Gaborone Bonnignton North, Takatokwane, Letlhakeng, and Tlokweng.
The resolution of the contested constituencies will test the ability of the UDC to present a united front in the 2024 National Elections will depend on the decisions made by the three leaders. It is essential for them to demonstrate maturity and astuteness in resolving the constituency allocation deadlock and ensuring the cohesion of the UDC.