When the Botswana Development Corporation (BDC) counts its bragging rights, it begins with entries in its project portfolio.
Enjoying the pride of place at the top of the list in the 2010 BDC annual report is Fengyue.
“The number of Group Companies continues to grow and major projects under implementation include the Glass Manufacturing Project which the Corporation is pursuing in partnership with a Chinese Company with a total project cost of P539 million. This project is based in Palapye and currently the key buildings are under construction.
The construction is expected to be completed in the last quarter of 2011 and will produce float glass for both domestic and export markets. Notable also is the large diameter steel pipe project under implementation and also based in Palapye. Satisfactory progress has been made on this and it is expected to be complete by May 2011. The total project cost is P137 million. The Corporation also approved funding for its 100% Subsidiary, Commercial Holdings (Pty) Ltd, for a commercial property. This development is estimated at P450 million and is to be based at Fairgrounds. It totals 26000 square meters and will include a hotel, office and retail space as well as residential space”, states the report.
In a press statement on the pages of the Sunday Standard two months ago the corporation is reluctant to dazzle readers with its biggest catch.┬á “BDC and Fengyue are partners in the glass manufacturing plant in Palapye. BDC is therefore not at liberty to discuss and disclose terms and conditions of the partnership.”
The two step dance in the public relations maneuver is a measure of the chasm that that the BDC is trying to span in a bid to restore the halo of its relationship with the Chinese company. The PR fancy footwork is only one of the examples in the BDC’s attempts to tidy up what may come to be the corporation’s biggest mess.
Depending on who you talk to, the project is either a cesspool of corruption or reports of corruption are a malicious slur against a corporation that “adheres to good corporate governance.”
An independent audit into the operations of the manufacturing plant in Palapye has unearthed systemic abuse of money by executives at the Government’s investment arm. The audit has also turned up a flagrant flouting of procedures by the contractor who may have been colluding with some of them to pass invoices for works and equipment not delivered at the site.?A report of which Sunday Standard is in possession shows that, Fengyue, has been overpaid by more than P100 million even as the project completion has dragged on much longer than anticipated. The audit was conducted by G4 Consulting Engineers.??The consulting engineers have also found that BDC money amounting to P9 million was illegally diverted to finance an adjacent project at a site not owned by BDC. Although the Oxygen Making project has nothing to do with BDC, the corporation’s money has been used to finance construction of the plant.??Investigations by Sunday Standard have revealed that an executive of Botswana Development Corporation is a shareholder in the Oxygen Making Machine project.??How BDC money was used to finance what is effectively a privately owned project not related to the corporation remains a mystery that baffled even the consulting engineers doing the audit.?“Please note further that the schedule of paid invoices includes an invoice for Oxygen Making Machine…
Oxygen making is not part of the 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,” says the Managing Director of G4 Consulting Engineers, Botsile Gubago in a confidential report to BDC Industrial Manager, Ms Rosemary Mogorosi.?“Our assessment shows the amount due and payable to the contractor as P254, 588,358 compared to P352, 000,000 as per your email. 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,” says the consulting Engineers.
Sensing possible corruption, the Directorate of Corruption and Economic Crime is reported to have taken a keen interest in the affairs of BDC.
This is despite an advert recently published by the Ministry of Finance in which loads of praises were heaped on BDC and its management.?The auditing engineers have also discovered that although BDC has paid over 90 percent towards equipment shipping, very few equipment items have been delivered to the glass manufacturing site.?“Please also note that with respect to equipment, that over 90 percent of the amount payable on shipping, which should be 25 percent of the contract amount, has already been paid, although from the equipment on the invoice schedule, other major equipment items are still to be shipped.”?The audit engineers end their correspondence to BDC Management by emphasizing 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.?“There could be additional items for which payment has been due to the contractor, relevant expenses and other costs as per article 10. We, however, believe that these items would be relatively minor and our opinion is therefore that the contractor has been overpaid by an amount in excess of P100, 000, 000,” says Gubago.?The BDC on the other hand insists that, “we would like to state for the record that BDC adheres to good corporate governance and is doing very well in terms of its financial performance and contribution to economic diversification and citizen empowerment.”
Skirting around corruption allegations, the corporation issued a press statement that, “all the allegations and the imbroglio surrounding issues of corruption and maladministration at BDC are unsubstantiated, self serving, false, malicious and to a large extent very defamatory.”
Responding to a Sunday Standard article based on the G4 audit report, BDC states that, “The article carried in the Sunday Standard entitled “Corruption mars BDC multi million pula project” is based on speculation. We find it libelous and indeed unethical that a story based on a confidential report which is yet to be submitted, discussed and verified by BDC finds its way to the Sunday Standard.”
If the corruption allegations died the day the BDC press statement hit the press, then its corpse has been exhumed for the kicking. A month after BDC issued its vitriolic rebuttal against the Sunday Standard story; Botswana Guardian carried another article revealing that the corporation’s board of directors had shortlisted three companies to do the forensic audit into the operations of the multimillion-float glass project.
By the time you read this, a draft is likely to be circulating among the privileged few.
And that is just the beginning.
The High Court has since suspended the quantity surveying aspects of a multi ÔÇômillion pula project that BDC is managing on behalf of Government.
Buoyed by the success of their QS colleagues, the engineers are up in arms, alleging all sorts of crimes at the country’s flagship finance corporation.
With the eagles flying low, children have started throwing stones.
A few members of the BDC Board privately acknowledge that not all is well.
Yet others say the Corporation needs a fresh start.
There are accusations that a number of Board Directors – past and present have helped themselves to the kitty.
The country’s corruption busting agency is not too far off the line.
Information reaching Sunday Standard indicates that DCEC has started to ask some uncomfortable questions.
And as they say, this may just be the beginning.
In the meantime, BDC management, at least through the adverts released by the Corporation’s Public Relations look at themselves in the mirror and still see themselves as among the best in town.
There is all probability that the mirror they are looking at, like BDC itself may be a somewhat fractured one.
