Minister says one law firm may have caused delay in privatisation
The Minister of Transport and Communication Tshenolo Mabeo has said that the engagement of sole law firm in managing the process of BTCL privatisation may have led to the delay in allowing Batswana to participate in the purchase of the BTCL shares.
In an interview with the WeekendPost Mabeo indicated that there has been delay in opening the shares to the public which he partly attributes to engagement of Monthe Marumo law firm in solely providing the advisory roles of parastatals Botswana Fibre Network (BOFINET) and Botswana Telecommunications Corporation Limited (BTCL).
“The danger of engaging one law firm in this process, which of course is in conflict of interest, may be that government business may have been delayed in the process,” he emphasised.
If it was different firms, they could have long concluded this privatisation process and shares opened for Batswana to take part, Mabeo highlighted. He said they could have concluded the process in December last year but were forced to postpone. The Minister pointed out that it consequently delayed services to the public.
According to Mabeo, engaging one law firm in BTCL privatisation process also puts the government at risk as it will act based on the informed foundation and decision from the law firm. The Minister stressed that the law firm should have declared its dual engagement by the parastatals and by extension the ministry in the process of privatisation – by making the government aware.
He added that it is a clear conflict of interest on the part of the law firm and that Law Society of Botswana which regulates lawyers should look into the matter. When asked by this publication, if it was not the responsibility of the ministry and concerned parastatals to avoid the conflict of interest by the law firm, the minister defended the latter saying “it was upon the engaged law firm not parastatals.”
Mabeo was speaking to the WeekendPost following a parliamentary business question session that revealed the alleged conflict in the process and progress of privatisation of the BTCL.
Member of Parliament for Gabane Mmankgodi, Pius Mokgware had asked Minister Mabeo to state the law firms involved in privatisation of BTCL process and the fees paid, including whether individuals involved are not from one law firm or partners in one law firm. Mokgware also asked the criterion that was used to select the law firms in both situations.
In answering, Mabeo stated that the two individuals advising BTCL and Botswana Fibre Network (BOFINET) are from the same law firm of Monthe Marumo and company incorporating Molatlhegi and Associates. He added that neither Bofinet nor BTCL were aware of this conflict until this week Monday (30th March 2015). The onus on declaring conflict of interest was declared by Monthe Marumo and Company incorporating Molatlhegi and Associates, Mabeo told parliament on Wednesday.
However, Mabeo said Monthe Marumo and Company incorporating Molatlhegi and Associates was directly appointed by both BTCL and Bofinet from their approved panel of legal firms. The panel of legal firms, he said was selected through selective tendering. He also noted that Collins Newman and Delloite Consortium were appointed by PEEPA through a competitive public tender process.
According to Minister of Transport and Communication, the official transaction advisors to government (the selling shareholder), appointed by the Public Enterprises Evaluation and Privatisation Agency (PEEPA), are Collins Newman and Deloitte (CND) Consortium. The total amount of the Consortium (transaction advisors) is P9.5 million.
The legal advisors in the consortium are Collins and Newman & Company. The legal fees according to the consortium contract with PEEPA signed in March 2011 are P2, 987, 000.00. “The legal advisors to the BTCL are Monthe Marumo and Company (in partnership with ENS Africa). They were engaged on the 6th of March 2014 at total fees of P1, 703, 916. 85.”
Bofinet further engaged Monthe Marumo and Company incorporating Molatlhegi & Associates to review and advise them on the draft possession and use Agreement and were paid a total amount of P47, 181.67 VAT inclusive.
In another question related to BTCL privatisation, in particular BTCL and Bofinet agreement, Mokgware had wanted the Minister to state whether the 4th November 2014 version of the Possession and use Agreement have been signed, and if the BTCL Initial Public Offering (IPO) has been launched as at 31st December 2014 as was planned, as well as if the postponement will attract legal costs.
“The BTCL IPO was not launched on the 31st December 2014. Government decided to postpone the launch to enable it to conclude the process of raising funds for the underwriting arrangements. Further, it was intended that the postponement would give Batswana ample time to raise capital to effectively participate in the purchase of the BTCL shares,” Mabeo answered.
According to Mabeo, the postponement of the IPO launch will not only attract additional legal fees but additional transactional advisory services. This is because some of the activities under the scope of transactional advisory services will have to be redone or updated, he said.
Special Economic Zone Authority’s (SEZA) P126 million Master Planning of Pandamatenga Special Economic Zones Business Case, Urban & Landscapes tender is in court after one of bidders, Moralo Design challenged its disqualification from the tender.
SEZA is transforming Pandamatenga into an Agropolis which will combine modern farming with top notch industrial, residential, commercial and recreational land use. The project is measured at 137, 007 ha which comprises of 84, 500 ha for commercial production, 12 400 ha for the subsistence production, 107 ha will be for Agro-processing while 40 000 ha will be for the Zambezi Integrated Agro-commercial Project (ZIACDP).
In their court papers, Moralo Designs, represented by Jones Moitshepi Firm, said they received a letter from SEZA on or around the 12th November 2020 notifying that their bid has been disqualified at the technical evaluation stage of the tender adjudication process.
In their response, Lonely Mogara who is Chief Executive Office of SEZA said Moralo Designs is not entitled to be heard by the court as the company never participated in the disputed tender hence SEZA knows the bidder as Moralo Design Consortium.
“Moralo Designs had failed to establish any right to be heard by the court. The fact that they had submitted a tender was not guarantee that they would be awarded the tender,” he said. “The reasons for the disqualification of Moralo Design Consortium’s bid were valid and justified because their bid was insufficient as it lacked vital information as required by the terms of reference.”
SEZA Chief said the requirements for the work plan and project programme were clearly stated in the Invitation To Tender (ITT). Moralo Design Consortium was not penalised for non-existent requirements. In disqualifying the bid by Moralo Designs Consortium, Mogara further indicated that SEZA considered that there was a requirement for a programme and work plan.
“The purported “project programme” that was submitted by Moralo Design Consortium failed to depict the activity durations, activity phasing and interrelations, milestones, delivery dates of reports and logical sequence of activities constituent with methodology and showing a clear understanding of the terms of reference,” said Mogara in responding affidavit.
He said the ITT required that there be provision of delivery dates within the programme hence Moralo Designs Consortium failed to consult with SEZA when they felt that such a requirement would be impossible to provide. He continued to say there was an avenue available when the tender was being prepared, but they failed to use it.
“Moralo Designs’ application for interim relief lacks merit and only seeks to delay SEZA from completing the evaluation and award of a tender that will serve the greater good of the nation,” said Mogara.
He went on to say Moralo Designs has no prospects of succeeding in its review application as the possibility of court granting the review are so remote in that the court does not possess the requisite technical knowhow on what constitutes an adequate work plan and what ought to be contained in it.
A bidder disqualified for failure to provide adequate information has no right to be protected by the court. Irreparable harm can only be suffered by one who has shown that there exists a right in so far as having stood the chance of being awarded the tender.
The financial benefit likely to be derived by Moralo Designs- which is highly unlikely- is outweighed by the nature of the project. In the unlikely event that the application for review is successful, they can claim for damages. The availability of such remedy weighs in favour of the interdict being refused. The refusal stands to benefit the nation more than the financial interest that Moralo Designs seeks to protect.
Moralo Designs failed to establish the urgency of their application. They waited for more than a month and half after the disqualification to approach the court on urgency. Meanwhile when delivering the State of the Nation Address (SONA) last year, President Mokgweetsi Masisi revealed that the detailed design and construction of 12 steel grain silos — with an overall storage capacity of 60 000 metric tonnes — is underway at the Pandamatenga SEZ and the P126 million project will be completed by August 2021.
President Mokgweetsi Masisi has taken a stern but unpopular decision within the August House by putting to an end a hefty P403, 200 monthly budget directed towards legislators’ housing allowance.
Since the beginning of the 12th Parliament in November 2019, MPs have been staying in rented spaces. At first they were lodged at Avani hotel and a whooping P6, 2 million was paid by government for accommodation and meals for Members of Parliament and their spouses from October 31, to December 20, 2019.
Minister of Finance and Economic Development, Dr Thapelo Matsheka could be forced to provide a detailed explanation to a number of Botswana Democratic Party (BDP) backbenchers who are not impressed with Government expenditure for the 2020/21 financial year.
The unconvinced lot smell a rat and suggest that the Minister should furnish them with all the balance sheets for all the procurements and reports of all the transactions carried out by government from April 2020. This is so because within them, there is an air of disbelief in relation to the use of national funds by the powers that be.