A contractor has raised a red flag over what he says are matters of clear malpractice and maladministration of government funds. In a scathing letter passed to Weekend Post, Moira (Pty) Ltd attorney raises some basic contractual contraventions between Public Procurement and Asset Disposal Board (PPADB), department of Roads and the contractor awarded.
The contractor conferred, Emark (Pty) Ltd, has been awarded the tender in question at a whopping P28 million under dubious circumstances. The tender comprises a “works contract for the resealing and road marking of Tshootsha – Mamuno road section II (40km) tender no. MTC 240/55/2017-2018.” Office of the President has this week been informed of the tender dispute.
In the dispute, Kgotso Botlhole of Lekorwe Legal Consultants, on behalf of Moira (Pty) Ltd, urged the OP in a scathing letter to halt implementation of the said multimillion road project until the matter is resolved at the courts. Information reaching Weekend Post suggests that the contractor (Emark) wants to implement the project so that they use the move as an excuse in case they lose the matter at the courts – where they believe it will be too late.
In the said letter to OP titled, “complaint of serious maladministration by the Director of the Department of Roads and the Chairperson of the Ministerial Tender Committee (MTC) in the Ministry of Transport and Communication/Moira (Pty) Ltd, (which is the client) /PPADB, Attorney General and Emark Enterprises (Pty) Ltd – case no: UAHGB – 00029 – 19” the contractor queries some essential tender procedures in the awarding of the tender.
The letter dated 5 February 2019 and which was copied to Permanent Secretary in the Ministry of Transport and Communications, Kabelo Ebineng as well as to PPADB urges Permanent Secretary to the President, Carter Morupisi to tread carefully not to implement the project until justice is reached.
“Our client is currently engaged in litigation commenced on an urgent basis against the Department of Roads (represented by AG) seeking to halt the implementation of a works contract titled “a works contract for the resealing and road marking of Tshootsha – Mamuno road section II (40km) tender no. MTC 240/55/2017-2018” which was awarded to Emark (Pty) Ltd,” attorney Botlhole told the highest decision making office in the country.
He further pointed out that having perused Maipelo Ragalase’s affidavit, who is the acting Deputy Permanent Secretary (Corporate Services) in the Ministry of Transport and Communication, 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 he 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.” This is notwithstanding that in the letter of acceptance concluding a contract with Emark for the performance of the works, a certain paragraph in question therefore clearly provides that:
“You shall agree to submit a Performance Security bond of 5% of the amount as stated in this letter of acceptance as per clause 4.2 of condition of contract for construction for building and engineering works designed by the employer within 28 calendar days from the date of acceptance of this letter (date of signing the contract acknowledgement), following the receipt of which, the engineer’s order to commence work will be issued,” the lawyer pointed this to OP as his main area of ‘emphasis.’
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. “Irrespective of when the bond was actually provided between these two dates, the Director has already issued a notice to Emark for the commencement of the works on 11 January 2019,”Botlhole highlighted to the Office of the President.
He also claimed to OP that the Director of Roads, Modisa Segokgo, authorized the occupation of site and the commencement of works by a civil contractor for a project awarded in the amount of P 28, 046, 343. 22 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, which lost the bid in the second position as they ran short of half a million to reach the 28 million mark, said “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 standard government practice.”
Secondly, the attorney further told OP that PPADB, acting in terms of Regulation 79(1) of the Public Procurement and Asset Disposal Regulations S.I. 12 of 2006 (Regulations) issued a directive to the Chairperson of the MTC and the Department of Roads to cease all procurement processes related to the tender pending the resolution of their client’s complaint, which was pending before it. The letter communicating this directive is dated 11 January 2019, he said.
“In her affidavit Ag. DPS (Corporate Services) Ragalase claims to have only seen the letter on 16 January 2019, after the Director had (unlawfully) issued a notice to commence the works. Be that as it may, the actions of both Ms. Ragalase and the Director thereafter do not demonstrate any level of adherence to the directive issued by PPADB,” Botlhole pointed out.
This is so because, he said a payment certificate was submitted in favour of Emark for the mobilization (advance payment) of the project on the very next day of 17 January 2019; and on 25 January 2019, the payment certificate was checked by one L. Lekgaotswe and approved on this date. Thereafter, he added that the Director of Roads inspects the certificate and requests that payment be made on 29 January 2019.
He continued: “he does so despite having been served with our client’s application on the same date. The payment is then received by the accounts department on 30 January 2019 and sent to government revenue office on 31 January 2019.” According to Botlhole, the conduct of both the Director and Ms. Ragalase clearly disregards the directive issued to them by PPADB and Regulation 79(1). Instead of seeking to halt the implementation of the works, he said they do the opposite, frantically seeking to implement the contract without following due process, such as taking receipt of the relevant bonds, and awaiting a decision from the PPADB. As at the date of this letter, he mentioned that the PPADB is yet to determine his client’s complaint.
Thirdly, and similar to how the Director issued a notice to commence without first taking receipt a performance bond from Emark, the Director has authorised the payment of advance payment without first taking receipt of the advance payment guarantee (bond), the attorney highlighted to Carter Morupisi.
“We believe these administrative irregularities by both the Chairperson and the Director are serious in nature, and warrant that your esteemed office investigate what we have alleged in herein and take disciplinary action against both the Director and the Chairperson. It appears quite clearly to us that they are hastily trying to implement the award of the tender, on the misguided belief that this will frustrate the relief sought by our client in the intended review application.”
Conduct such as what we have detailed above seriously erodes public confidence in the procurement processes employed by government, he said adding that there is no rational/acceptable reason to explain the conduct of these two officers. “If the government itself does not comply with the laws it created, it losses its legitimacy and becomes a catalyst for inexplicable and corrupt practices. These officers must be called to account, and we beseech your esteemed office to act accordingly,” he said.
Temporarily, when approached for a comment on the matter, Permanent Secretary in the Ministry of Transport and Communication Kabelo Ebineng said he cannot immediately remember details to the disputed matter and instead referred this publication to the Director of Roads Segokgo. Segokgo was said to be outside the office at the time of press. However, his deputy, Kitso Chibule spoke to this publication but could not be drawn into the issue at hand and instead referred this reporter back to the PS in the Ministry.
Meanwhile, in the court case PPADB is one of the respondents cited in the matter and they have not opposed the relief sought by Moira and they have instead filed a notice to abide. AG filed an answering affidavit opposing the application on behalf of both the Chairperson of the MTC and the Department of Roads.
The affidavit is disposed to by Maipelo Ragalase, the acting Deputy Permanent Secretary (Corporate Services) in the Ministry of Transport and Communication. She is also the Chairperson of the MTC in question. The parties appeared before Acting Judge Khan on 31 January 2019, who decided having heard the parties briefly, that the AG be given time to file its answering affidavit before the matter is heard on 6 February 2019. The case continues.
Stanbic Bank Botswana Quarterly Economic Review indicates that Botswana will fail to meet some of its Vision 2036 targets, particularly unemployment reduction and reaching high-income status.
The report says this is mainly due to the slow economic growth that the country is currently experiencing. This Quarterly Economic Review focuses on the 2020 Budget Speech.
The first paper reviews the entire budget with its key observations being that this budget is prepared as prescribed by the Public Finance Management Act; the priorities it seeks to address are drawn from Vision 2036 and the eleventh
The 2020 budget Speech, which was the maiden speech by the Minister of Finance and Economic Development, Dr. Thapelo Matsheka, and the first after the 2019 general elections, was delivered to Parliament on the 4th of February 2020.
It has been well received by the labour unions, business community, and the public at large as well as international organisations such as the International Monetary Fund (IMF).
It mainly derived its support from key facets including, emphasis on changing the business-as-usual approach to development; outlining the transformation agenda; fiscal reform that minimizes the negative impact on economic development and human welfare, competiveness and the decision to implement the 2019 negotiated and agreed public sector.
The budget’s progress review shows that economic growth was consistent with the NDP 11 projections, with growth of around 4 percent. At this growth rate, the country would neither ascend to a high-income status nor reduce unemployment towards the Vision 2036 target of a single digit.
Simple calculations of this review confirm that the economy will need to grow the Vision 2036’s target of 6 percent over the next 16 years for per capita income to increase from around USD 8,000.00 to above USD 12,000.00 in current prices.
Further, the population is anticipated to grow by only 2 percent per annum.
For this reason, the focal areas for the forthcoming FY’s budget include measures to increase economic growth towards an average of 6 percent per annum.
Economic diversification is reportedly progressing fairly well. The report says, the share of the non-mining private sector in value added has risen to 66 percent in 2018 from to 63 percent in 2015.
The sectoral pattern of growth showed that the performance of services sector (particularly transport & communications, trade, hotels & restaurants, and finance & business services) has been the silver lining and that of mining sector was subdued whilst the utility sector disappointed.
The drive towards the service sector of the economy, especially to low-productivity activities (tourism, public administration, wholesaling and retailing) does not bode well for the country’s development aspirations.
In the previous versions of this Quarterly Review, it was noted that there is need for the rethinking of economic diversification. Since the country’s domestic market is small, it is inevitable that economic diversification not only focus on broadening the product mix, but also the composition of exports and markets.
This understanding of economic diversification has not been embraced by this year’s budget. Consequently, Botswana’s exports are still overwhelmingly diamonds, which means that the rest of economic sectors are still highly dependent on foreign-exchange earnings from diamonds. Thus, “the transformation programme requires a review of the country’s entire ecosystem”.
The budget review of the economic context also depicts that an economy with positive medium-term prospects, with growth expected to recover to 4.4 percent in 2020 from the expected growth of 36 percent in 2019 largely due to faster growth of services sectors and, thereafter, to slow-down to 4 percent in 2021.
These projected growth rates are comparable to those of the IMF staff’s baseline scenario of 4.2 percent in 2020 and 4 percent in 2021. Thus, the business-as-usual scenario produces growth rates that are still too low to achieve Botswana’s development objectives and create enough jobs to absorb the new entrants into the labour market.
Trade tensions between the two major markets for diamond exports, viz., the United States of America and China, is one of the factors that are cited as contributing to, indeed, undermining not only the domestic growth, but also the fiscal position.
Another notable downside risk to both global and domestic growth is outbreak of the coronavirus in China around January 2020. This has been declared as a global health emergency. In an attempt to contain the spread of the novel coronavirus pneumonia, the Chinese authorities have ordered city lockdowns and extended holidays, of course, at the expense of near- term economic growth, according to the new Stanbic Bank Botswana report.
According to Nomura Holdings Inc., fewer migrant workers returned for work than in previous years and business activities have been slow to pick up. The havoc wreaked by the virus on the world’s second largest economy is likely to spill over to the global economy. In fact, it has resulted in a glut in crude oil and, thereby placed oil markets into a contango, i.e., a market structure where near-term prices trade at a discount to future contracts.
It also presents significant risks one of Botswana’s main drivers of economic growth, diversification and foreign exchange earnings. According to the Financial Times (February 13, 2020), Chinese tourists spent $130 billion overseas in 2018. Regardless of whether the growth materializes, the projected domestic growth rate would not transform the economy to a high-income one.
Progress towards reduction of unemployment, to a target of single digit, and poverty and achieving inclusive growth has also been relatively slow, the Stanbic Bank Botswana Review says.
Ministry of Presidential Affairs, Governance and Public Administration (MOPAGPA) has through the Office of the President (OP) proposed to avail Orapa House for use by private training institutions as well as research institutions involved in the area of technology development.
For a very long time the monumental building located in the heart of the city has been a white elephant, despite government purchasing it for nearly P80 million from De Beers in 2012.
However, government has now identified a productive use for the iconic building. “The overall vision is for the building to be transformed into a hub for digital technology research and development to be carried-out by institutions, such as; Limkokwing University, BIUST, BITRI and other relevant stakeholders.”
The decision was taken as government traverse a new path of transforming the economy from a mineral led economy to a knowledge based economy through the promotion of research and innovation. However, the facility will need major maintenance to be carried-out in order to meet the requirements of the proposed change in use.
“The work will include provision of laboratories, work stations, production areas and seminar rooms; audio visual centre, high speed internet connectivity, exhibition areas and offices,” reads the proposal note for the development.
These developments will be done through the refurbishment and maintenance of the main building, workshop, and ablution block, gate house, parking area, grounds, and access control and security service.
“There will be minimal modifications to the structure as it stands. The project is estimated to cost approximately P50, 000, 000,” says the report. In this regard, it is said, the initial scope of the OP facility will be modified to accommodate the envisaged digital technology research and development hub.
With funds needed to improve the building, OP has requested that; “the 2020/21 annual budget provision for Orapa House will need to be increased by P37,500,000 from P2,500,000 to P40,000,000 to kick start the maintenance works.” Funds will be sourced from the projects that have been delayed due to Covid-19 protocols during the 2020/21 financial year.
The building has been a thorny issue for government for years. Initially, OP was expected to move there but the move never materialised. At one point it was a question of whether the Office of the President and the Ministry of Finance and Economic Development were planning to override a decision by Parliament which rejected the proposal to buy Orapa House under the belief that government may be buying its own property. The building was to be bought at a negotiated cost of P79 million.
Again in 2012, Government had wanted to buy Orapa House for a negotiated P79m but the Finance and Estimates Committee of Parliament had rejected the request because of the inconsistencies realised in the supporting documents of the proposed procurement. The valuation of the building was put at P74 million.
The Ministry of Lands and Housing had initially offered De Beers P73, 000,000 as the purchase price. However, De Beers countered with P85, 000,000. On negotiation and converging of the minds, the selling price was finally agreed at P79, 000,000.
Auditor General, Pulane Letebele, has expressed discontentment at the worrying and deteriorating state of brigades in the country.
In an audit inspection which was carried out at Tshwaragano Brigade in Gabane, a number of observations showed weaknesses and shortcomings in the conduct of the financial affairs of the institution.
According to Letebele’s report, former students of the brigade had been engaged to carry out maintenance works on the school premises, comprising of painting, tiling, plumbing and electrical works, which covered the period from July 2017 to June 2018.
Although the agreed maintenance period had elapsed, the works had not been completed because of unavailability of funds and this situation had persisted up till the time of inspection in November 2019.
Auditor General says arrangements should have been made in time for funds to be available to complete these relatively minor works even before the works commenced.
Various contractors had been engaged for clearing the bush and for the supply of concrete stones, pit and river sand and hiring equipment for digging the trench towards the construction of an auto mechanics workshop, the report said.
It stated that the cost of services and supplies provided totalled P117 949.80. However, despite the services and the supplies having been paid for, the construction works had not commenced for a long period afterwards, resulting in the trench filling back in.
The audit inquiries had not elicited satisfactory responses as both the institution and the Ministry had not accepted the responsibility for the project, although orders for the provision for the supplies had been made. For their part, the Ministry had stated that they had sub warranted funds for the purchase of porta cabins.
Letebele indicated that it is therefore confusing that a project which is critical to the functioning of an institution such as this one would commence without a well-defined plan.
Furthermore, the accounting and maintenance of records for the supplies items were not of the standard prescribed by the Supplies Regulations and Procedures in that the supplies ledger cards, the main accounting records for Government assets, were not properly maintained for the recording of receipts and issues.
This had resulted in significant discrepancies between physical and ledger balances, while in other instances the supplies items had not been recorded at all.
The report says 24 of the 91 new computers found in the computer laboratory at Kumakwane ABC campus were not recorded anywhere, as were the other computers in the storeroom which could not be counted due to the disorderly storage conditions.
The institution had entered into a contract agreement with a security company for the provision of security services at Tshwaragano Brigade, ABC and Horticulture campuses at Kumakwane for a 2-year period which ended in June 2018, WeekendPost learnt.
After the contract expired in June 2018, an extension was granted till the 30th September 2018. Since then, there has been no security service coverage for the institution to-date. According to Auditor General, in the face of prevailing crimes, it is of paramount importance that government properties be protected by provision of security services at all times.
At Tlokweng Brigade, it was noted that the kitchen staff were working under difficult conditions as the kitchen facilities and equipment, such as the cold room, tilting pot, food warmers and solar power for hot water were dysfunctional. The kitchen roof was leaking and men’s restrooms was not working. All these need to be brought to a reasonable and functional state of repair.
The kitchen staff should use a purpose-designed Rations Ledger for the recording of receipts and issues of foodstuffs to reflect the usage of those items. As far back as 2014 the Department of Buildings and Engineering Services had found that the house occupied by the bursar was uninhabitable on account of structural defects, the report said.
A site visit during the audit had established that the house was indeed unfit for occupation as there were cracks on the walls, power switches were not working and the roof was leaking. On a sadder note, there were a number of finished items of clothing, such as dresses, shirts, and jackets from students’ practical exercises from the Fashion Design Textiles Workshop.
Auditor General shared her take on this, saying: “I have not been able to ascertain the policy on the disposal of products from these practicals. A trace of 103 green acid-proof overalls which had been purchased in August 2018 had indicated that there was no record of these items having been recorded or issued, nor were they available in stock. I was not able to obtain any explanation for this situation.”
Kgatleng brigade was also audited and inspected by Auditor General who observed that the brigade has 26 institutional houses at Bokaa, both old campus and new campus. Some of these houses are very old and dilapidated, with two declared uninhabitable. The condition of the houses is a clear indication of lack of care and maintenance of these properties.
At the time of the audit, there was no contractor engaged for the provision of security guard services at the new campus, after expiry of the previous one in July 2019. It is hoped that steps would be taken to safeguard the security of the premises and government properties against any acts of hooliganism.
In August 2019, there was a break-in at the electrical and at the plumbing maintenance workshops and a number of high value items, such as drilling machines, bolt cutters, spanners and cables, were stolen. The break-in and theft were reported to the police.
“However, at the time of writing this report I was not aware of the outcome of the police investigation, nor of any loss report submitted in terms of the Supplies Regulations and Procedures,” Letebele said.