More drama at the Botswana courts is playing out, this time the permanent secretary in the Ministry of Transport and Communication, Kabelo Ebineng is compelled to defend his 20 year friendship with businessman Nicholas Zakhem who convinced him to terminate a contract for a Consultant engaged in the construction of the Charles Hill- Ncojane road.
Zac Construction, whose Managing Director is Zakhem is the contractor in the project. The two parties are throwing jabs of conflict of interest at each other and the permanent secretary has stated that he has even borrowed money from Zakhem, a red flag already observed by the consultant, Bothakga Burrow.
Zakhem has flatly refused to work with the Consultant, Bothakga Burrow Botswana (BBB) accusing them of being difficult to work with and later alleging conflict of interest on their part – they had tendered for the same project, he says. BBB was awarded the Consultant contract by the PPADB with the Ministry of Transport and Communications as the procuring entity.
As of 16 February 2018 Bothakga Burrow Botswana has dragged the Ministry of Transport and Communications before court accusing it of unlawfully terminating its contract. Ebineng terminated BBB’s contract with effect from 16 February 2018 citing convenience on the part of the Employer or procuring entity. But Bothakga is arguing that the Ministry did not follow the correct procedure when terminating the contract and the Public Procurement and Asset Disposal Board (PPADB) agrees with Bothakga.
Zac Construction was awarded the Charles Hill – Ncojane tender on 26th November 2013 for an amount of P436 279 046. 45 to be completed in 36 months on a design and build basis. In January 2017, sixteen months after commencement of construction Zac or Zakhem complains to the Ministry of Transport citing conflict of interest on the part of the consultant, Bothakga Burrow. His views are such that the consultant has not been properly appointed and he threatens to stop taking instructions from the Consultant and requests that Bothakga Burrow be removed from the project. The then permanent secretary, Elias Magosi dismissed Zakhem’s allegations and warned him to abide by the contract which he would have defaulted on the contract.
Records show that in May 2017, one month after the appointment of Kabelo Ebineng as Permanent Secretary at the Ministry of Transport, Zakhem restarts work after a four week unauthorized stoppage of work, and reconfirms that they will not work with the Consultant, Bothakga Barrow, and again he requested the removal of the Consultant.
What has irked Bothakga Burrow directors before their contract was terminated is that the Permanent Secretary at a meeting held on 19th June 2017 he confirmed that “he and Mr Nicholas Zakhem know each other socially. He mentioned that he has even had the opportunity to borrow money from him because of their relationship and they continue to have a relationship.” After this meeting Bothakga Burrow requested that Ebineng recuse himself from meeting dealing with the matter but he refused stating that there was no conflict of interest.
During the course of July 2017, construction was suspended by the consultant, because the contractor was no longer accepting project works to be tested, as per the contract, however the Contractor proceeded to construct 12km of road, whose quality could not be vouched for. Ebineng immediately requested Bothakga to withdraw the suspension and he instructed Zac Construction to proceed with construction work unsupervised.
Records further show that by September 2017 the Parliamentary Committee on Communications, Works, Transport, and Technology, had visited the project site to understand the challenges on the project. Shortly thereafter the Contractor on his own volition stopped construction on the project, and demanded to be paid for the 12km of road that he had refused to have tested. The Consultant was asked by the permanent secretary to certify payment for the 12km, and declined to do so without verifying the quality of works in accordance with the contract.
Indications are that at some stage the Permanent Secretary to the President, Carter Morupusi intervened and advised that the project be executed in accordance with the signed contracts of all parties. In all meetings, Zac Construction requested that the Consultant be removed as a pre-condition to return to work on the project.
WeekendPost learns that by the end of 2017 the Ministry had paid Zac Construction for the 12km of untested road works; failed to test or verify the quality of the constructed work; acceded to the contractor’s request to remove the Consultant from the project; the permanent secretary has refused to recuse himself from dealing with the matter which he is said to be conflicted; the PPADB had notified him that his position is untenable.
Ebineng’s defense of his relationship with Zakhem is a simplified one. He states that he knows most of the contractors, engineers, and consultants that deal with his Ministry. He states that most of them he went with them to school, met them at play grounds, socializes with them hence he wonders if he will recuse himself for almost everyone in town. On the other hand allegations of conflict of interest on the part of Bothakga were dismissed by the PPADB but the Ministry through Ebineng held that conflict was inherent.
The two parties are now in court with Bothakga Burrow Botswana pleading with the court to reverse the unlawful decision of the permanent secretary. Bothakga Burrow Botswana’s contract is worth P40 million. Judge Rannowane gave both parties an ear on 16th March 2018 and will deliver judgement next month.
Some in the Ministry are worried that Ebineng’s actions are setting a bad precedent that will have far reaching consequences for the entire construction industry where contractors can pick and choose who they want to supervise them. They also raise a concern for the role of PPADB in awarding and terminating contracts, where government can willfully undermine its own laws and institutions. After receiving a notice to terminate their contract from the permanent secretary BBB wrote to PPADB seeking clarity and confirmation on whether the Board had approved that their contract be terminated as is the prescription of the law.
PPADB DISOWNS EBINENG’S GAMBITS
In a letter dated 23rd February 2018 PPADB writes “…that the award of this contract was a result of a tendering process which was in line with the PPAD Act and the tender was awarded by PPADB. In light of your appreciation of the provisions of the PPAD Act and further applicable statutory instruments, the termination of the contract must be preceded by the approval of the PPADB.”
Bothakga Burrow Botswana (BBB) had argued that in line with the PPAD Act, the termination should only be implemented after the ministry has obtained authority or approval from the PPADB. BBB further argues that, in previous correspondences addressed to them by the Ministry of Transport and Communication, the latter had indicated that they were seeking approval from the Board to terminate the contract and therefore they (BBB) expected that letter of termination issued to them by the Ministry should have been preceded by approval of such termination by the Board.
From previous correspondences the Permanent Secretary, Kabelo Ebineng had appreciated that the contract entered into with BBB cannot be terminated without requisite approval from PPADB. The PPADB decided at its meeting held on 22nd February 2018 after considering a submission from BBB, that the “termination was an un-procedural act as it contravened a provision of the PPAD act.” It boldly states that the decision to terminate the contract was not sanctioned by the Board.
The PPADB went further and informed Ebineng through a letter dated 23rd February 2018 that “The Board at its sitting of the 22nd February 2018 considered the Consultant’s submission and noted with concern that the Ministry has proceeded to terminate the contract following the lapse of the period of the Notice of intention to Terminate without the requisite Board’s approval to resile from the Contract.
The Board determined that indeed the Ministry ought to have sought approval for authorization to resile from the contract as mandated by Section 47 of the PPAD Act, and that the omission by the Ministry to so do results in the inevitable conclusion that termination was un-procedural and therefore unlawful as it contravened a provision of the Act. The Board therefore has confirmed to the Consultant that it has not approved termination.”
“The Board is also greatly concerned that the Ministry has deliberately breached the law as it proceeded to resile from the Contract without seeking the requisite approval from the Board…The Ministry is cautioned from deliberately contravening the Act and is advised to rectify the error by reinstating the contract and follow due process if it wishes to invoke its rights to terminate the contract. The Ministry should note that the Board is mandated by Section 27 of the PPAD Act to ensure that all procuring entities comply fully with all the provisions of the Act.” The PPADB copied its correspondence to the Auditor General and the Permanent Secretary to the President “for their information and appropriate action.”
EBINENG REMAINS DEFIANT
However in a response letter dated 28th February 2018, Ebineng remained defiant and informed the PPADB “…on the above understanding, and considering the exigencies of the matter as well as our responsibilities as a procuring entity to manage the contractual issues and consequences thereto, we confirm the termination of contract with Bothakga Burrow Botswana (Pty) ltd, with effect on 16 February 2018.” Ebineng stated confidently that “we believe that the notice to terminate cannot be requested where the Contract is terminated at the convenience of the Employer.”
He stated that in order to avert the possibility of incurring avoidable costs, which may crystalize as a result of not moving swiftly in finding a solution to the underlying problem; as well as taking into consideration the public interest, “which I had discussed extensively, with both the Contractor and the Engineer, a decision had to be made. After considering many factors it made sense to terminate one of the parties with whom we had contracted. In the circumstances we terminated Bothakga Burrow Botswana,” said Ebineng.
In June 2019, a case involving the Attorney General was brought before the High Court, in which the applicant Letsweletse Motshidiemang challenged Sections 164 (a) and 167 of the Penal Code. The applicant contended that these sections are unconstitutional because they violate the fundamental rights of liberty and privacy.
The applicant argued that these sections violated his right and freedom to liberty as he was subject to abject ignominy. These laws subjected the LGBTIQ community to brutal and debasing treatment through social control and public morality. On the 1st of November 2017, the Botswana High Court further allowed Lesbians, Gays and Bisexuals of Botswana (LEGABIBO) to join the case as amicus curiae.
However, in July 2019, the respondents, in this case, i.e. the Government, filed an appeal against this iconic High Court ruling seeking re-criminalization of homosexuality. Human Rights Group has criticized this move of the Government all over the world. The appeal was heard before five judges at the Court of Appeal on Tuesday. The State was represented by Advocate Sidney Pilane, while LEGABIBO and Letsweletse Motshidiemang were represented by Tshiamo Rantao and Gosego Rockfall Lekgowe, respectively.
Non-Governmental Organizations advocating for the LGBTIQ+ community joined the two parties at the Court of Appeal during this case. They argue that the minority group should enjoy their rights, especially the right to privacy and health. Botswana Network on Ethics, Law and HIV/AIDS (BONELA) Chief Executive Officer, Cindy Kelemi says the issues being raised by LEGABIBO are that as individuals belonging to the LGBTIQ community, they have and must share equal rights, including the right to privacy, which also speaks to being able to involve in sexual activities, including anal sex.
“Those rights are framed within the constitution, and therefore a violation of any of those rights allow them to approach the courts and seek for redress. We do not need the law to be regulating what we do in the privacy of our homes. The law cannot determine how and when we can have sex and with who, so the law does not have any business in that context. What we are saying is that the law is violating the right to privacy,” she said on the sidelines of the decriminalization case in Gaborone on Tuesday.
The first case involving the homosexual act was the Utjiwa Kanane vs the State in 2003. Contrary to section 164(c) of the Penal Code, Kanane was charged with committing an unnatural offence and engaging in indecent practices between males, contrary to section 167. The conduct at issue involved Graham Norrie, a British tourist, and occurred in December 1994. (Norrie pleaded guilty, paid a fine, and left the country.)
Kanane pleaded not guilty, alleging that sections 164(c) and 167 both violated the constitution. The High Court ruled that these sections of the Penal Code did not violate the constitution. Kanane then appealed to the Court of Appeal. BONELA CEO recalls that in its judgment then, the High Court indicated, Batswana were not ready for homosexual acts. Twenty years later, the same courts are saying that Batswana are ready, she says.
“They gave the explicit example that shows that indeed Batswana are ready. There are policies and documents in place that accommodate people from marginalized communities and minority populations. The question now is that why is it hard now to recognize the full rights of an individual who is of the LGBTI community?” She further says intimacy is only an expression. The law that restricts homosexuality makes it hard for LGBTIQ members to express themselves in a way that affirms who they are.
“We want a situation where the law facilitates for the LGBTIQ community to be free and express themselves. The stigma that they face in communities is way too punitive. They are called names; some have been physically violated and raped at times. It shows that the law doesn’t not only prevent them from expressing themselves, it also exposes them to violence.” The law on its own, Kelemi submits, cannot change the status quo, adding that there is a need for more awareness and education on human rights and what it means for an individual to have rights.
“As it is now, it is very tough for some to do that because of a legal environment that is not enabling. We also want to see a situation where LGBTIQ+ people can access services and be confident that they are provided with non-discriminatory services. It is challenging now because health care providers, social workers and law enforcement officers believe that it is illegal to be homosexual. What we are saying is that if you have an enabling law, then that will facilitate for people to be able to express themselves, including accessing health services,” Kelemi said.
“As we are doing this advocacy work, one of the issues that we picked up is that there is lack of capacity, especially on the part of healthcare workers. We noted that when we provide services or mobilize Men who have sex with other men (MSM) to access health facilities, health care workers are not welcoming, forcing them to hideaway. We must put an end to this to allow these people the freedom that they equally deserve.”
The President, Dr Mokgweetsi Masisi, has declared as an act of corruption the attitude and practice by government officials and contractors to deliver projects outside time and budget, adding that such a practice should end as it eats away from the public coffers.
For a very long time, management problems and vast cost overruns have been the order of the day in Botswana, resulting in public frustrations. Speaking at the commissioning of the Masama/Mmamashia 100 Kilometres project this week, Masisi said: “There is a tendency in government to leave projects to drag outside their allocated completion time and budget. I want to stress that this will not be tolerated. It is an act of corruption, and I will be engaging offices on this issue,” Masisi said.
In an interview with this publication over the issue, the Director-General of the Directorate on Corruption and Economic Crime (DCEC), Tymon Katholo, says, “any project that goes beyond its scope and budget raises red flags.” He continued that: “Corruption on these issues can be administrative and criminal. It may be because government officials have been negligent or been paid to be negligent by ignoring certain obligations or procedures. “This, as you may be aware has serious implications on not only of the economy but even the citizens who use these facilities or projects,” Katlholo said, adding that his agency is equally concerned.
According to the DCEC director, the selection, planning and delivery of infrastructure or projects is critical. In most cases, this is where the corruption would have occurred, leading to a troubled project. A public finance expert at the University of Botswana (UB), Emmanuel Botlhale, attributes poor project implementation to declining public accountability, lack of commitment to reforming the public sector, a decline in the commitment by state authorities and lack of a culture of professional project management.
In his research paper titled, ‘Enhancing public project implementation in Botswana during the NDP 11 period,’ Botlhale stated that successful implementation is critical in development planning. If there is poor project implementation, economic development will be stalled. Corruption is particularly relevant for large and uncommon projects where the public sector acts as a client, and experts say Megaprojects are very likely to be affected by corruption. Corruption worsens both cost and time performance and the benefits expected from such projects.
Speaking during this week’s Masama/Mmamashia pipeline commissioning, Khato Civils chairman said Africans deserve a chance because they are capable, further adding that the Africans do not have to think that only Whites and Chinese people can do mega projects. During his rule, former president Ian Khama went public to attack Chinese contractors for costing the government a move that ended up fuelling tensions between China and Botswana after Khama dispatched the then Minister of Foreign Affairs, Pelonomi Venson Moitoi, to China to register Botswana’s complaints with Chinese government-owned construction companies. Botswana had approached the Chinese government for help in its marathon battle with Chinese companies contracted to build, among others, the failed controversial Morupule B power plant and refurbishment of Sir Seretse Khama International Airport (SSIK).
A legal battle between former Botswana Democratic Party (BDP) legislator Samson Moyo Guma and First National Bank (FNB) over a multimillion oil refinery project intensified this week with Justice Zein Kebonang referring the matter to Court of Appeal for determination. The project belongs to Moyo Guma’s company called United Refineries which he has since placed under judicial management.
The war of words between Moyo Guma and FNB escalated after the company’s property worth millions of Pula were put up for sale in execution by the bank and scheduled to take place on 8th October. It emerges from Court papers that the bank had secured an order from the High Court to place the company’s property under the hammer.
Moyo Guma then also approached the High Court seeking among others that the public auction scheduled for 8th October 2021 be stayed. He contended that the assets that were to be sold belonged in reality to United Refineries and that as the company had been under judicial management at the time of the attachment, the intended sale in execution was unlawful.
He also sought the Court to declare that the writs of execution against the properties of guarantors and sureties of United Refineries Botswana Holdings Propriety Limited (the company) are unlawful. Moyo Guma also sought a stay of the execution against the property known as Plot 43556 in Francistown, that is, the land buildings, plant and machinery which make up the property and any all immovable or movable property belonging to the guarantors and sureties of the company pending finalization of the winding up of United Refineries.
But FNB disputed Moyo Guma’s assertions and submitted that the properties in question belonged to TEC (Pty) Ltd and not United Refiners. TEC Pty Ltd which is one of the shareholders in United Refineries is one of the sureties and co-principal debtors of a debt amounting to P24 million owed by United Refineries to FNB. FNB argued in papers that the properties belonged to TEC because it was TEC which had passed a covering mortgage bond in its favour over the property it now sought to execute.
Moyo Guma submitted that the covering mortgage bond passed in favour of FNB did not tell the full story as the property in question was in truth and fact owned by United Refineries and not TEC Pty Ltd. He maintained that the shares had been had been passed by the company in exchange for the properties in question and that the parties had always been guided by the spirt of the share agreement in dealing with each other despite delays in the change or transfer of ownership of plots 43556 and plot 43557 in Francistown.
Kebonang said it was clear to him that the two plots (43556 and 435570 belonged to United Refineries notwithstanding that TEC (Pty) Ltd had passed a mortgage bond over them in favour of FNB. “For this reason the properties were immune from attachment or sale in execution so long as the judicial management order was in place,” he said.
The background of the case is that Moyo Guma together with five other investors, namely Elffel Flats (Pty) Ltd; Mmoloki Tibe; TEC (Pty) Ltd; Profidensico (Pty) Ltd and Tiedze Bob Chapi, each bound themselves as sureties and co-principal debtors in respect of a debt owed by a company called United Refineries Botswana Holdings (Proprietary) Limited (the Company), to First National Bank Botswana (FNBB) (1st Respondent).
FNB had extended banking facilities to the company in the amount of P24 million which was then secured through the suretyship of Moyo Guma and other shareholders. Court records show that Moyo had on the 11th February obtained a temporary order for the appointment of a provisional judicial manager in respect of United Refineries and it was confirmed by the High Court on 24th September 2019.
In terms of the final court order by the High Court issued by Justice Tshepho Motswagole all judicial proceedings against the company, execution of all writs, summons and process were stayed and could only proceed with leave of Court. Court documents also show that First National Bank had sued the company and the sureties for the recovery of the debt owed to it and through a consent order, the bank withdrew its lawsuit against the company.
But FNB later instituted fresh proceedings against Moyo Guma and did not cite the company in its proceedings. “There is no explanation in the record as to why the Applicant was now reflected as the 1st Defendant and why the company had suddenly been removed as the 1st Defendant. There was no application either for amendment or substitution by the bank,” said Justice Kebonang.
FNB had also argued that it sought to proceed to execute against Moyo Guma and other sureties on the basis of the suretyship they signed and that by signing the suretyship agreement, Moyo and other sureties had renounced all defence available to them and could therefore be sued without first proceedings against the principal debtor (United Refineries). The question, Kebonang said, was that can FNB proceed to execute against Moyo Guma and other sureties on the basis of the suretyship contracts they signed?
“The starting point is that the Applicant (Moyo Guma) and others by binding themselves as sureties became liable for debts of the principal debtor and such liability is joint and several. He said the consequences of placing the company under judicial management means that every benefit extended to it should also extend to sureties.
“If the company is afforded more time to pay or its debt is discharged, reduced or compromised or suspended the obligation of sureties is to be likewise treated. It follows in my view that where judicial proceedings are suspended or stayed against the company, then any recourse against the sureties is similarly stayed or suspended,’ said Kebonang.
He added that “In the circumstances of this case, it seems to me that so long as the company is under judicial management, the moratorium that applies to it must also apply to its sureties/guarantors and no execution of the writs should be permitted against them. Any execution would be invalid.”
“Mindful that there is judicial precedent on this point in Botswana, at least none that I am aware of, and given its significance, I consider it prudent that the Court of Appeal must provide a determinative answer to the question whether a creditor can proceed against sureties where a company is under judicial management,” said Kebonang.
Pending the determination of the Court of Appeal, he issued the following order; the execution of writs issued in favour of FNB against Moyo and other sureties/guarantors of United Refinery are hereby stayed pending the determination of the legal question referred to the Court of Appeal.