Friday, May 20, 2022

BDC glass project raises more questions than answers

More questions than answers are developing at the Botswana Development Corporation (BDC)’s Palapye glass manufacturing plant that is still under construction.

The over half billion Pula project will be the second glass manufacturing plant in Botswana and has so far attracted a lot of controversy amid allegations that the government’s investment arm ÔÇô BDC ÔÇô has already overpaid the contractor by over P100 million.

In addition, the corporation is alleged to have paid for the construction of an oxygen plant adjacent to the glass manufacturing plant although the oxygen plant is not part of the turnkey project.

A senior executive of BDC is allegedly linked to the ownership of the oxygen plant.
The turnkey project, being built on an engineering, procurement and construction (EPC) basis is a partnership between BDC (43 percent) and Fengyue Glass Manufacturing company of Shanghai in China (57 percent).

Ironically, Fengyue is the main contractor of the project. Both BDC and Fengyue officials at the Palapye site were at pains to explain why Fengyue was appointed contractor while its specialization is in the area of glass manufacturing as opposed to construction.

BDC spokesperson Boitswarelo Lebang refused to divulge details concerning the appointment of Fengyue to journalists touring the plant last week save to say she was not at liberty to disclose contractual details of the project.

She could also not answer if there was no conflict of interest for a partner in the project to be the one who is also the contractor.

It is unclear whether Fenguye, apart from its specialization in the glass manufacturing industry, is also specialized in construction.

Lebang said BDC was not being conned in the project since it holds regular site meetings with the contractor to ensure that the project is on course.

Fengyue’s administration manager, who was introduced to the journalists as Simon, maintained that this was not the first project that they had undertaken as a contractor.

Notwithstanding the lack of clarity, Simon said the project, which was started last year in May, is 70 percent complete and if all goes according to schedule, it will be completed by December.
Lebang said P140 million has already been disbursed.

After completion, the project is expected to employ at least 300 people.

An audit undertaken by G4 Consulting Engineers on the project has shown that the project contractor has already been overpaid by P100 million. The consultants also queried the use of BDC money (US$1.5 million) to finance the construction of the oxygen plant when it is not part of the turnkey project.

“Please note further that the schedule of paid invoices include an invoice for Oxygen Making Machine… Oxygen making is not part of turnkey contract and is being built outside the site as we witnessed at the site meeting. This invoice should therefore not have been paid by BDC,” wrote the managing director of G4 Consulting, Botsile Gubago, in a confidential report to BDC Industrial Manager, Ms Rosemary Mogorosi.

“Our assessment shows the amount due and payable to contractor as P254 588 358 compared to P352 000 000 as per your e-mail. We are therefore of the opinion that, at this point in time, the contractor has been overpaid by an amount in excess of P100 000 000,” said the consulting engineers in the audit report.

The auditors further discovered that although BDC had paid 90 percent towards the equipment shipping, very few equipment items had been delivered to the glass manufacturing site.

The audit engineers emphasized that the Chinese contractor should be compelled to submit a full and detailed listing of equipment so far delivered to the site so that the list could be assessed against the invoices so far paid by BDC.

While Lebang maintained that only P140 million had been disbursed to date, her information sharply contrasts with the audit engineers’ confidential report to BDC.

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