Saturday, October 23, 2021

Basis Points takes government to court

The Minister of Tertiary Education Alfred Madigele is caught up in a vicious battle between the Human Resource Development Council (HRDC) which is under his ministry and Public Enterprises Evaluation and Privatization Agency (PEEPA) on the one hand and Basis Points Capital – controversial company owned by businessman Bakang Seretse on the other. 

Basis Points Capital which was contracted by the then Ministry of Education and Skills Development in 2013 for the outsourcing of Grant/Loan scheme project took the Ministry to the High Court for alleged failure to make payment to the contractor.

According to documents passed to the Sunday Standard dated April 2018, “There is evidence to indicate that although the contract between basis Point and the MOESD expired on February 2014 it was extended by conduct.” 

The documents state that on 8th February 2016, Basis Points Capital filed a lawsuit against the Attorney General as the representative of the then Ministry of Education Skills and Development on the basis of the doctrine of fictional fulfillment, which states that if a party to a contract which is subject to as suspensive condition is deliberately prevented from fulfilling that condition, the condition is deemed to have been fulfilled.

The documents state that based on this, Basis Points Capital was claiming payment amounting to P1 609 600.00 constituting the outstanding balance of the contract price, 12 percent interest on late payment and P400 000 for cost overruns.

The documents further state that on 19th October, the project team and steering committee were consulted and the meeting unanimously agreed that the then Ministry of Education and Skills Development had breached its contractual obligations by not facilitating Basis Points Capital to perform its obligations under the contract.

It was then agreed that the matter be resolved amicably and that the settlement offer be accepted. Through a letter dated 17th October 2017, Basis Points Capital conveyed its settlement proposal as follows: Payment of the outstanding P1600 000; that it (Basis Point Capital) be permitted to complete the project and the abandon its claim of P400 000 for cost overruns and payment of legal fees.

It emerges in the documents that on 2nd March 2018 Basis Points Capital workshopped Ministry of Tertiary Education Research, Science and Technology and its stakeholders (HRDC and PEEPA) on the status of the project implementation and the way forward.

The Ministry of Tertiary Education Research, Science and Technology then consulted its stakeholders (HRDC and PEEPA) on 8th March where it was agreed that the project is overtaken by events and that there is no need to continue with the project.

“However, the Hon Minister on 16 March 2018 decided that Basis Point Capital should be allowed to complete the project and that its settlement proposal as stated above should be accepted. This was then made an order of the court on 21st March 2018 when the parties appeared before the High Court in order to finalise the matter,” read the documents.

The Ministry now awaits a hard copy of the Court Order and a draft contract from Basis Points Capital which will indicate the terms of the new contract and the outstanding deliverables.

Sunday Standard was unable to establish if Basis Points Capital was awarded the old contract without going through an open tender process or it was a single source tender.

The documents from Madigele’s ministry state that in February 2013, Cabinet supported the proposal of the then Ministry of Education and Skills Development to outsource the disbursement of student allowances to Botswana Post in an effort to improve service delivery.

In May 2013, according to the documents, a contract was concluded appointing Basis Point Capital to provide transaction advisory service to outsource the management of the Education Support Fund for period of (9) months.

According to the Auditor General report that was recently scrutinized by the Public Accounts Committee, Basis Point Capital was irregularly appointed as fund managers of the National Petroleum Fund (NPF).

It further emerged during the PAC hearing that Basis Points had inside information when it submitted the bid to the Ministry of Mineral Resources, Green Technology and Energy Security.

The Auditor General has revealed that the appointment of Basis Point Capital owned by businessman Bakang Seretse as fund manager for the NPF was irregular.

In its reported dated 28 March 2018, the Auditor General found that Basis Points Capital had submitted an incomplete bid and should have been disqualified.

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