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MPs reject P 900 million suspicious tender

Publishing Date : 12 August, 2019

Author : DAVE BAAITSE

Members of Parliament (MPs) on Thursday reigned supreme when they rejected a supplementary budget proposal brought before parliament by Minister of Finance and Economic Development, Kenneth Matambo in order to finance the suspicious P900 million North-South Carrier II tender.


In a rare development, amid political unrest in the ruling party, a number of legislators from the Botswana Democratic Party (BDP) joined ranks with the opposition benches to reject the supplementary budget. After a spirited debate, coupled with ruling party caucuses at intervals, 26 MPs voted against the supplementary, with 24 voting in favour.


The North- South Carrier II Project which was not part of the current National Development Plan 11 was conjured recently by cabinet, with the several sources claiming that the tender was tailor made for a company that would later help fund BDP’s general elections campaign. The BDP has rejected this outright in a statement released a fortnight ago. The BDP recently made it public knowledge that the party is broke and that it will raise funds in order to finance its bid to retain state power. The party has pledged to go back to its members for finances.


The tender, which was initially valued at P700 million was later altered to P900 million before being awarded to Khato Civils. It has emerged from Finance and Estimates Committee, chaired by Member of Parliament for Francistown West, Ignatius Moswaane that the project did not have a budget, and that it was not conceptualised by the ministry as per procedure.


 “The project had no urgency because it was going to be covered by the NS2 (North South Carrier 2). It is alleged that the Office of the President then became the sponsor of the project then put pressure on the Permanent Secretary to embark on the project,” the committee noted in its recommendations.


According to Report on Supplementary Estimates of Expenditure from the Consolidated and Development Funds from the Finance and Estimates Committee Financial Paper No. 1 of 2019/2020, the Minister should have motivated for the inclusion of the project into the NDP 11 first through the midterm review.


The report also indicate that with the commissioning of the Pump Station 4.1 to increase the water volumes, further pumping and injections of Masama water into NSC1 will have not been possible. What came out clearly was that, with Pump Station 4.1 in action, Masama would need a separate pipeline if it is to be pumped, the committee resolved. The report also rebuffs the involvement of the Directorate of Intelligence and Security Service (DIS) in projects’ and contractors. It indicates that the DIS issued directives to the Ministry which led to the cancellation of one of the NSC11 tenders.


“What the Ministry out to have done was to have given the contractor an opportunity to advance its justification to proceed with the works instead of cancelling the contract immediately,” said the report. The committee is of the view that the NSC 11 projects would have been at an advanced stage had it not been for the involvement of DIS. According to Moswaane’s report Water Utilities Corporation Management Tender Committee had flaunted the Procurement procedures by evaluating and awarding a tender without first securing the project funding.


“The procedure is that you first secure the budget because the process of tendering is expensive and one should not incur such costs or commit government without assurance that the project will proceed or be funded,’’ the report said. The WUC Management Tender Committee evaluated the tender in June 2018, and Khato Civils was deemed the lowest cost priced amongst the 3 bidders which had proceeded to this stage at a contract price of P781 555, 356. 90.


This price was above the initial project budget of P750 000 000 by P31, 555, 356.90 (4.2%). The Management tender Committee awarded the tender to Khato Civils pending contracting. “This process was procedural as the Presidential Directive was also clear in who should undertake the pre- tender and pre- contracting process. It has not been adequately explained why the Ministry needs P900 000 000 for the project that was awarded at an escalated value of P781 555, 356. (From an original budget project of P 750 000 000)”.


On awarding the tender to Khato Civils, the bidder was further advised of the condition of the award as relating to the fixed prices and non-escalation of costs as per the approved bid. Cabinet members were reportedly divided over the awarding of the project but they were overruled and the matter was put to bed by authorising the award of the tender to Khato Civils at P900 million.


Moswaane on Thursday told parliament that he was aware, and that he had information indicating that the tender had already been awarded. This was despite the fact that Minister of Finance and Economic Management, Kenneth Matambo claimed that the tender was yet to be awarded, according to his knowledge. The awarding of the tender is also linked with the departure of Chief Executive Officer (CEO), of WUC, Mmetla Masire weeks ago after he reportedly disapproved the purchasing of the pipes directly from China.


Masire was reportedly adamant that the pipes can be sourced readily available in Botswana and South Africa, instead of being procured in China, sources said. It is said that procurement of pipes went on even though the budget was not approved by the ministry because other stakeholders we not on board when the decision was made. Sources indicate that some funds which were allocated to refurbish Lobatse Water Reticulation Infrastructure were diverted to seal the deal between the Ministry and Khato Civils.


The tender entails refurbishing the North South Carrier 1 (NSC-1) Pump Stations PS 1.1 (Tender WUC013 of 2017) and PS 2.1(Tender WUC013 of 2017) to enhance efficiency. The main objective is to upgrade and refurbish the Pump stations in order to provide required water outputs to BPT1A1 and BPT2A1, respectively. This scope of works cover general requirements for assessment, supply, delivery and installation of Mechanical, Civil, Electrical, Control Equipment, Instrumentation Equipment, Actuators, Associated Accessories, and documentation (drawings and manuals).


Khato Civils / NTR Technology Holdings JV (KCNTRJV) having demonstrated in their tender proposals that they have the technical, financial and managerial skills to complete the Contracts successfully was appointed on an EPC basis by the Water Utilities Corporation (WUC) of Botswana on 16 February 2018 for the refurbishment of Pump Stations PS1.1 and PS2.1 located on the North- South Carrier 1 pipeline. The Contracts valued at BWP 101, 767,567. 33 and BWP 93, 451, 640. 26 are running simultaneous and must be completed within 15 months ending on 12th August 2019.


Pump station PS1.1 is situated at Letsibogo dam, while Pump Station PS2.1 is situated approximately 32.6km downstream from Letsibogo dam, at Moralane, together with Break Pressure Tank 1 (BPT1A1). Both pump stations are currently running with Constant Speed Drive Pumps. One of the activities embedded in the upgrade and refurbishment of the two pump stations is to change from Constant Speed Drive Pumps (Roto- Starter) to Variable Speed Drive (VSD) Pumps. For correct and accurate VSD pump selection, good understanding of the condition of the current NSC-1 pipeline system, working in synergy with the two pump stations is required.


This project covers all equipment in the Pump Stations, including modification of the suction and delivery pipe work and construction of a building to house Variable Speed drive units. The second requirement is for the Scheme SCADA upgrade, engineering and configuration to cater for all changes which have been effected at the pump station to allow for monitoring, control, data acquisition and automation in order to enhance operational efficiency of the scheme.

What MPs said

NDABA GAOLATHE

P900million is a tremendous quantum of resource so even in our debates we should not be scanty because no one has given us cost benefit analysis. I have no basis of approving these projects. There are litigations issues in other projects so there is a possibility there could be hidden information on this one. We have a DIS institution which I have always categorised as rogue because of the way our government is structured.  We need to have oversight institutions not interference and between the two I will prefer listening to an oversight authority. I will not support the P900 million projects.

SLUMBER TSOGWANE

No one has ever said that the people do not need water, they do and we need to provide them with that as a resource. So as MPs our task here is to release the funds not to be tender adjudicators. If you want to be a tender adjudicator you can go and leave this house, here our job is to pass laws. Let’s release the funds then if anything the relevant authorities will assess the tendering process. Like it or not we will pass this so that our people get the water they so need.

POLSON MAJAGA

Our people in Nata-Gweta, Kutamogoree, Molepolole and Palapye need water and we should provide that to them. But my main concern is the P900 million. To me this is very high and we should not be spending so much while there are other needs that the voters need. Some of these things we know them, we have been sub-contractors before and right now we cannot justify how we arrived at this amount because it is very simple. Personally I approve the project for Batswana across the nation to be availed water but I do not approve the amount needed for the project.

KEFENTSE MZWINILA

We need to draw water for Batswana. We spend between P300K and P400K on water bowsing daily in all the 18 constituencies. We want to increase quality of water supply and we are not going to be cancelling the National South Carrier 2. We have a delay on Mmamashia plant and we are trying to find a new solution on this issue because water demand is growing.  


IGNITIOUS MOSWAANE

Khato Civils has been awarded the tender despite the minister dismissing that fact. I can even avail minutes of that meeting when the tender was awarded because it is said it was a presidential order. So the minister is misleading this house when he says the tender is yet to be awarded. So I stand by the committee (estimates) recommendations. The minister should also tell this house that Water Utilities is not supposed to award tenders as per the PPADB Act. But PPADB officials have told us that Water Utilities has refused to furnish them with a vetting letter since 2016. So this project with this huge amount should not be allowed to pass.

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