Thursday, February 6, 2025

Closed tender for multi-billion pula projects raises eyebrows

Would any Motswana-owned business have made P5 billion in the past five years? That is the question that some in construction and project management are asking themselves following a Request for Expression of Interest (REI) for the services of a development manager that has been floated by the Ministry of Transport and Public Works. The document says that the Development Manager will service a pipeline of 77 project at a cost of P13.2 billion. The projects will be carried out as part of the Transitional National Development Plan.

The REI invited development managers within the infrastructure and built-environment to express their interest in the execution of such projects by submitting company details.

Stage 1 of the tendering evaluation process sets one particular condition that many, if not most, will not be able to meet. The section on “Company financial statement and turn-over” prescribes the following conditions: “cash flow over past three years (expected minimum BWP2 million per month or equivalent) and average total certified payments received from contracts in progress or completed with the past five years (expiated minimum BWP2 billion.)” Bidders are also required to submit “a typical organizational chart for a major project (>BWP200 million) during each phase of study and project implementation.” All these elements make up what the REI describes as “capability or financial strength” which will be awarded 20 marks.

“Which Motswana has that kind of money?” poses a project management professional, adding that the bar has been set as high to exclude virtually all Batswana who would otherwise qualify.

Another source tells an even more intriguing tale: that a benchmarking exercise was recently undertaken with a South African company based in Durban, that such company is rumoured to be linked to a Botswana Democratic Party bigwig and that the financial-strength requirements were based on the financial strength of the company in question in order to close everybody else out.

A study by New World Wealth, a global wealth intelligence firm based in South Africa, has found that Botswana has only two centi-millionaires, 80 multi-millionaires, 2100 millionaires and that US$19 billion is in private hands. Centi-millionaires are those with wealth of US$100 million or more; multi-millionaires have wealth of US$10 million or more; and millionaires have wealth of US$1 million or more.

The REI, which was issued by the Procurement Oversight Unit in the Ministry of Transport and Public Works, was put out in December 2022. It says that the contract will be awarded at an undisclosed date this year following “a closed tendering process” for the pre-qualified companies and subsequent commercial negotiations.

“The participating companies will be expected to sign confidentiality agreements prior to receipt of any enquiry documents or discussions,” the REI says.

Among other obligations the successful bidder will be expected to implement a project governance model to ensure execution of projects within the desired time, cost and quality in a “transparent manner”; aid government in strengthening, monitoring and supervising the delivery of the projects; source the necessary core technical expertise; as well as implement change management, business processes and systems which are more efficient for implementation of infrastructure projects.

Interestingly, variations of the flowery, double-barrel language of this REI has been in use for more than two decades now but has never stopped the opposite of what is prescribed from happening. Just this past week, Ntlo Ya Dikgosi, the lower house of parliament, heard that the contractor rehabilitating the Molepolole-Thamaga road “abandoned” the construction site and had to be “urged” to return and complete the project.

As has become tradition, mega-construction projects are always attended by credible allegations of corruption. On that basis, there will certainly be such allegations when the P13.2 billion is disbursed to contractors. Vulture-tenderpreneurs, which now include Chinese construction companies, will be particularly eyeing road construction projects which, by themselves, are worth billions of pula.

Appearing before the parliamentary Public Accounts Committee last year, the (still suspended) Directorate of Corruption and Economic Crime Director General, Tymon Katholo, said that while the number of corruption cases is decreasing that didn’t mean that the country is getting less corrupt but that the corruption is becoming more sophisticated.

“Our corruption is graduating from petty corruption to grand corruption,” said Katholo, adding much later that the Ministries of Local Government and Rural Development as well Transport and Public Works are the most corrupt.

“Grand corruption” has precise technical meaning that has been developed by Transparency International (TI), the Berlin-based international corruption watchdog. TI defines “grand corruption” as the abuse of high-level power that benefits the few at the expense of the many.

“Through grand corruption, vast amounts of public money are systematically siphoned off to the accounts of a few powerful individuals, at the expense of citizens who should actually benefit. Financial institutions and other enablers assist those involved in laundering the proceeds. When grand corruption and state capture happen, high-level officials may also use control over legislative and regulatory powers to legalise their activities and to weaken oversight and enforcement functions. Typically, those involved in grand corruption benefit from impunity by interfering directly with the justice system and stymieing enforcement in order to thwart being held to account. Using the levers of state control, they may also suppress independent efforts by civil society and the media to investigate and expose corruption,” TI says.

Sunday Standard has learnt from good sources that the cost of multi-million-pula government tenders are often egregiously and routinely inflated and that the tender documents are made so technically sophisticated that it is near-impossible to detect this crime. Having taken years to form, the cartels doing this are said to have entrenched themselves in both the public and private sector and are almost impossible to legally excise from the public procurement system.

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