Tuesday, September 22, 2020

Corruption claims rock P8 billion Morupule Power Station project

The Botswana Power Corporation (BPC) has awarded the P8 billion Morupule B Power Station project to state-owned China National Electric Equipment Corporation (CNEEC) despite advice from the Chinese Government that the company is not authorized to undertake a project of that size ÔÇô Sunday Standard investigations have revealed.

In another controversial turn of events, the company, owned by the Chinese government, was allowed to increase their bid price by close to P 2 billion, from the initial US$ 693 million to US $970 million after the closing of tenders in December 2007. Some insiders at the government enclave are unhappy that this violated tender requirements.

The Ministry of Minerals’ Energy and Water Resources announced this week that “project funding is being arranged and secured by government through the Ministry of Finance and Development Planning.” The press release further states that “the ministry has already made available P1.5 billion to facilitate early mobilization.”
Sunday Standard can, however, reveal that under the tender requirements, the winning company was to arrange and secure funding for the project. The company was, however, awarded the multi-billion project although it had failed to raise funding.
Minerals, Energy and Water Resources Minister, Ponatshego Kedikilwe, confirmed to the Sunday Standard this week that, together with Vice President Lt Gen Mompati Merafhe, they had approached the Chinese Ambassador to Botswana, Ding Xiaowen, who advised them that of the Chinese state contracting companies that were bidding for the Morupule B Project, only Dongfang Electric Corporation is certified and is accorded the Grade A category for Power Plant turn- key construction. The Chinese Ministry of Construction and Housing, which is responsible for regulating contracting construction companies in China, maintains a registry (re-constituted in 2000) of officially approved and registered Engineer, Procure, Construct (EPC) contractors who are authorized to undertake large and complex projects, in superior or Grade A (Unlimited value, and complexity), including power plant construction. The list comprises ninety-two state owned contractors and the state owned CNEEC is not one of them although it has been awarded the P8 billion Morupule B Power Station project.

Kedikilwe told Sunday Standard that, upon receiving the letter from the Chinese Ambassador, they passed it on to the BPC. Kedikilwe says the BPC technical team, however, carried out its own assessment and recommended CNEEC. Unconfirmed reports claim that key members of the BPC technical evaluation team in Morupule were threatened and intimidated by some BPC bosses into changing their recommendation from DongFang Electric Zelan to CNEEC.

The technical evaluation team awarded CNEEC 90% and DongFang/ Zelan JV 76%. Insiders say this is highly questionable considering that CNEEC had to adjust their price by more than US$ 200 million from US $693 million to US $ 970 million to bring their bid price in line with the BPC tender requirements while the DongFang price was in line with the tender requirements at US $910 million.
Minister Kedikilwe confirmed that the CNEEC bid price went up substantially following a series of meetings where a number of issues were raised.
Raising further questions is the fact that DongFang had been recommended by the Chinese government and had also been able to arrange and secure funding from China Construction Bank and Standard Bank South Africa.
BPC Public Relations Manager, Tlhomamiso Selato, would not comment.

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