Friday, July 19, 2024

Botswana reels from high cost of corruption

Botswana will lose more than 95% of the P500 million spent in the construction of the controversial Fengyue Glass Manufacturing project in Palapye which is currently being auctioned.

Sunday Standard investigations have turned up information that Botswana will only recover P20 million from the auction of the plant, a paltry four percent of the P500 million spent in the construction of the plant.

Project Liquidator Nigel Dixon-Warren confirmed this week to the Sunday Standard that they hope to raise about P20 million as the final auction price of the project assets because of the state of the assets; the location of the plant; limited information on assets being auctioned; lack of engineers during the project and poor management of the project prior to liquidation.

He says the expected final amount is realistic given the circumstance and perhaps even exceeded expectations because assets to be auctioned are scrap; there is nothing that any buyer can do with the assets, and they are of low value.

“We have low expectations because if anybody would like to set up a Glass project they would rather opt to buy new equipments from China than buying the ones we are auctioning which are of low value. These equipments have no warranties as compared to new equipments that can be easily bought from China,” said Dixon-Warren.

This comes only a week after Sunday Standard investigations revealed that Botswana will lose up to P20 billion in the planned sale of Morupule B power plant also in Palapye. The two projects that were hoped to jump-start the economy of Palapye village have been rocked by allegations of corruption.

The expected loss of about P11 billion from the two Palapye projects is equal to about 80% of Botswana’s total development budget for the 2016/2017 financial year which is P14, 82 billion.

The loss from the two projects is more than the combined development budget allocations of the five ministries that got the highest awards being the Ministry of Defence Justice and Security at P3, 5 billion, Ministry of Minerals Energy and water Resources at P3, 45 billion, Ministry of Works Transport and Communications at P1, 4 billion, the Ministry of Local Government at P1, 2 billion and the Ministry of education at P1 billion.

Botswana has been battling for two years to find a contractor to complete the Palapye glass manufacturing plant but no contractor was willing to take the job

This is the reason why the auction process was preferred.

Dixon-Warren further told Sunday Standard that when they were appointed as liquidators they relied on little documentation; in fact most of the documentation that they laid their hands on came from Standard Chartered Bank which he said was not a normal source one would expect to get information from.

“The equipments were purchased using Electronic Credits using the Standard Chartered Bank, That is how we got the little information or records relating to payments. The little information we got from Standard Chartered did not even provide us with the accurate technical details that we would have needed for a project of that magnitude,” said Dixon-Warren.

He blames the mess on the management of the Fengyue Glass Project. He says management was extremely poor and unfortunately Botswana Development Corporation (BDC) took the blame although the contractor was the one controlling the project.

“I know for a fact that at one point BDC tried to get access to contactor’s information, the contractor refused even though BDC was the investor,” said Dixon-Warren.

Before the auction the liquidator engaged Glass specialists from the United Kingdom to assess the equipment unfortunately even the boxes containing some of the assets were written in Chinese making it difficult to understand what was contained in the boxes and how it was supposed to operate.

“It is a very unfortunate situation. Huge amount of money was spent and the project was never complete,” Dixon-Warren told Sunday Standard.

During the assessment of the project prior the auction Dixon-Warren as the Liquidator said his team realised that the location of the Glass Project compromised the viability of the project.

“Even our sand in Botswana is a problem because it is rich in iron contents, with that iron contents it means it has to be bleached, it has to go through chemical process to try and extracts iron because if left like that it was not going to produce clear glass but the colour of a beer glass. To put that chemical process it meant huge money. This means the project was not viable at the beginning,” said Dixon-Warren.


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