A company owned by business magnate, Nickolas Zakhem, ZAC Construction will now heave a sigh of relieve after Court of Appeal (CoA) confirmed its claim which suggested that construction giant Elsamex Botswana acted in bad faith by unlawfully kicking it out of a P118 million Jwaneng-Kanye road sub-contract.
This dispute has also delayed the progress of the Jwaneng-Kanye road which is a sponsored by the World Bank. According to a claim brought before the court, Elsamex frustrated ZAC from carrying out contractual obligations and caused delays in progress before abruptly cancelling the contract leaving the latter’s plant idle.
Elsamex had in 2015 sub-contracted ZAC for three contracts being an earthworks contract, a culvert construction contract and a supply of concrete for the P1 billion Jwaneng-Kanye Road which is still under construction. The Kanye-Jwaneng section of the road is a component of the World Bank’s Output and Performance Based Road Contract (OPRC) Package 1 pilot project, which is approximately 123 kilometers.
Out of the P1 billion, Elsamex sub-contracted ZAC to do earthworks, culvert and supply of concrete for P118 million. This contract was ended abruptly leading to a dispute which took three years to settle. According to court papers seen by this publication, ZAC made claims for sum of P6 million in respect of idling plant, rentals, salaries and wages and water shortages. The second claim was sum of P22 million for works executed by ZAC while the third claim was for P31 million in respect to breach of contract.
According to court documents, interest in respect of each claim is claimed at 10 percent per annum. Before arbitration, ZAC received only P16 million for what he has already done in the works. The dispute went to arbitration where ZAC successfully won. Before ruling that Elsamex acted in bad faith in the sub-contract, by also cancelling the agreement unlawfully then coming with a bid to have ZAC’s claims reduced, the arbitrator Rauf Abdulla awarded ZAC P47 million.
“….The Defendant (Elsamex) did unreasonably delay processing of claims and payments thereby frustrating the claimant (ZAC) from carrying out contractual obligations and thereby also cause delays to progress. The defendant did unlawfully cancel the contract…The Defendant did display bad faith during negotiations and opportunities to prevent this dispute and subsequent cancellation,” said the arbitrator.
After arbitration, ZAC went to the High Court which confirmed the award from the arbitrator. Justice Jennifer Dube ordered that ZAC be paid P47 million, but Elsamex appealed the judgment before claiming that the calculation of claims was erroneous, also stopping short of accusing the arbitrator of misconduct.
CoA dismissed Elsamex’s argument of the arbitrator having errered saying the company failed to use the rules for the conduct of arbitration which states that a party which received an award should issue a notice to the other party about an error or mistake and ask the arbitral tribunal to correct any error within 30 days upon the receipt of the award.
CoA dismissed Elsamex appeal with costs meaning that ZAC stands to consolidate P47 million in the P118 million failed contract. Elsamex-ITNL JVCA is a joint venture between Elsamex from Spain and IF&LS Transportation Networks Limited from India. It has won an over P1 billion ten-year Jwaneng-Kanye road contract which started in May 2014 but was marred by delays which also involved legal disputes.
Former Umbrella for Democratic Change (UDC) Member of Parliament for Gaborone North, Haskins Nkaigwa has confirmed his departure from opposition fold to re-join the ruling Botswana Democratic Party (BDP).
Nkaigwa said opposition is extremely divided and the leadership not in talking terms. “They are planning evil against each other. Nothing much will be achieved,” Nkaigwa told WeekendPost.
“I believe my time in the opposition has come to an end. It’s time to be of value to rebuilding our nation and economy of the country. Remember the BDP is where I started my political journey. It is home,” he said.
“Despite all challenges currently facing the world, President Masisi will be far with his promises to Batswana. A leader always have the interest of the people at heart despite how some decisions may look to be unpopular with the people.
“I have faith and full confidence in President Dr Masisi leadership. We shall overcome as party and nation the current challenges bedevilling nations. BDP will emerge stronger. President Masisi will always have my backing.”
Nkaigwa served as opposition legislator between 2014-2019 representing Botswana Movement for Democracy (BMD) under UDC banner. He joined BMD in 2011 at the height public servant strike whilst Gaborone City Deputy Mayor. He eventually rose to become the mayor same year, after BDP lost majority in the GCC.
Nkaigwa had been a member of Botswana National Front (BNF), having joined from Alliance for Progressives (AP) in 2019.
Botswana has received assistance worth over P100 million from Japanese government since 2019, making the latter of the largest donors to Botswana in recent years.
The assistance include relatively large-scale grant aid programmes such as the COVID-19 programme (to provide medical equipment; P34 million), the digital terrestrial television programme (to distribute receivers to the underprivileged, P17 million), the agriculture promotion programme (to provide agricultural machinery and equipment, P53million).
“As 2020 was a particularly difficult year, where COVID-19 hit Botswana’s economy and society hard, Japan felt the need to assist Botswana as our friend,” said Japan’s new Ambassador to Botswana, Hoshiyama Takashi.
“It is for this reason that grants of over P100 million were awarded to Botswana for the above mentioned projects.”
Japan is now the world’s fourth highest ranking donor country in terms of Official Development Assistance (ODA).
From 1991 to 2000, Japan continued as the top donor country in the world and contributed to Asia’s miracle economic development.
From 1993 onwards, the TICAD process commenced through Japan’s initiative as stated earlier. Japan’s main contribution has been in the form of Yen Loans, which are at a concessional rate, to suit large scale infrastructure construction.
“In Botswana, only a few projects have been implemented using the Yen Loan such as the Morupule “A” Power Station Rehabilitation and Pollution Abatement in 1986, the Railway Rolling Stock Increase Project in 1987, the Trans-Kalahari Road Construction Project in 1991, the North-South Carrier Water Project in 1995 and the Kazungula Bridge Construction Project in 2012,” said Ambassador Hoshiyama.
“In terms of grant aid and technical assistance, Japan has various aid schemes including development survey and master planning, expert dispatch to recipient countries, expert training in Japan, scholarships, small scale grass-roots program, culture-related assistance, aid through international organizations and so on.”
In 1993, Japan launched Tokyo International Conference on African Development (TICAD) to promote Africa’s development, peace and security, through the strengthening of relations in multilateral cooperation and partnership.
TICAD discuss development issues across Africa and, at the same time, present “aid menus” to African countries provided by Japan and the main aid-related international organizations, United Nations (UN), United Nations Development Programme (UNDP) and the World Bank.
“As TICAD provides vision and guidance, it is up to each African country to take ownership and to implement her own development following TICAD polices and make use of the programmes shown in the aid menus,” Ambassordor Hoshiyama noted.
“This would include using ODA loans for quality infrastructure, suited to the country’s own nation-building needs. It is my fervent hope that Botswana will take full advantage of the TICAD process.”
Since then, seven conferences where held, the latest, TICAD 7 being in 2019 at Yokohama. TICAD 7’s agenda on African development focused on three pillars, among them the first pillar being “Accelerating economic transformation and improving business environment through innovation and private sector engagement”.
“Yes, private investment is very important, while public investment through ODA (Official Development Assistance) still plays an indispensable role in development,” the Japanese Ambassador said.
“For further economic development in Africa, Japan recognizes that strengthening regional connectivity and integration through investment in quality infrastructure is key.”
Japan has emphasized the following; effective implementation of economic corridors such as the East Africa Northern Corridor, Nacala Corridor and West Africa Growth Ring; Quality infrastructure investment in line with the G20 Principles for Quality Infrastructure Investment should be promoted by co-financing or cooperation through the African Development Bank (AfDB) and Japan.
Japan also emphasized the establishment of mechanisms to encourage private investment and to improve the business environment.
According to the statistics issued by Japan’s Finance Ministry, Japan invested approximately 10 billion US dollars in Africa after TICAD 7 (2019) to year end 2020, but Japanese investment through third countries are not included in this figure.
“With the other points factored in, the figure isn’t established yet,” Ambassador Hoshiyama said.
The next conference, TICAD 8 will be held in Tunisia in 2022. This will be the second TICAD summit to be held on the African continent after TICAD 6 which was held in Nairobi, Kenya, in 2016.
According to Ambassador Hoshiyama, in preparation for TICAD 8, the TICAD ministerial meeting will be held in Tokyo this year. The agenda to be discussed during TICAD 8 has not yet been fully deliberated on amongst TICAD Co-organizers (Japan, UN, UNDP, the World Bank and AU).
“Though not officially concluded, given the world situation caused by COVID-19, I believe that TICAD 8 will highlight health and medical issues including the promotion of a Universal Health Coverage (UHC),” said Hoshiyama.
“As the African economy has seriously taken a knock by COVID-19, economic issues, including debt, could be an item for serious discussion.”
The promotion of business is expected to be one of the most important topics. Japan and its partners, together with the business sector, will work closely to help revitalize private investment in Africa.
“All in all, the follow-up of the various programs that were committed by the Co-Organizers during the Yokohama Plan of Actions 2019 will also be reviewed as an important item of the agenda,” Ambassador Hoshiyama said.
“I believe that this TICAD follow-up mechanism has secured transparency and accountability as well as effective implementation of agreed actions by all parties. The guiding principle of TICAD is African ownership and international partnership.”
Directorate on Intelligence Services (DIS) Director General, Brigadier Peter Magosi is said to be hell-bent and pushing President Mokgweetsi Masisi to reshuffle his cabinet as a matter of urgency since a number of his ministers are conflicted.
The request by Magosi comes at a time when time is ticking on his contract which is awaiting renewal from Masisi.
This publication learns that Magosi is unshaken by the development and continues to wield power despite uncertainty hovering around his contractual renewal.