Thursday, October 28, 2021

Judge ‘smells corruption’ in MFDP tender

“I’ll tell you, everything here smells of corruption,” said Justice Dr. Zein Kebonang some 15 minutes into the hearing of a case in which a company owned by a Gaborone motor magnate has been recommended as the preferred bidder for a government tender.

The extent of the judge’s suspicion is such that he is already asking questions about referring the permanent secretary involved in the tender adjudication as well as members of the ministerial tender committee (MTC) to the Directorate on Corruption and Economic Crime.

The matter relates to a Ministry of Finance and Development Planning (MFDP) tender in which Zambezi Motors and Varsha Enterprises bid to lease office accommodation to the Accountant General, a department within MFDP. The former is owned by motor magnate, Ishmael Nshakazhogwe while the latter is owned by real estate and media mogul, Said Jamali.

Tendering rules from the Public Procurement and Asset Disposal Board (PPADB) allow procuring entities to seek clarification from a bidder in writing where the former feel that there is “ambiguity.” With no ambiguity being apparent, Jacob Momene, an MFDP Deputy Permanent Secretary (Corporate Services), initiated contact with Zambezi through a letter, asking the company to reconfigure its tender. Similar courtesy was not extended to Varsha and the judge queried why there seemed to be “so much interest with respect to one bidder.”

Observing that there was no ambiguity that needed to be cleared up, Justice Kebonang looked askance at this development. He enquired from T. Motsumi, the Attorney General Chambers lawyer representing the ministry: “What business did the Deputy PS have in writing [Zambezi]?” Variations of that question came a short while later in the form of “What business did the Deputy PS have?” and “Why did the Deputy PS have to write this letter?” In response to the latter, Motsumi said, “My Lord, that is a question that I’m unable to answer.” It was then that the judge revealed what smell his nose was picking up. To the latter’s question of whether the letter that Momene wrote to Zambezi was sanctioned by the PPADB, Motsumi literally had no answer. One part of the letter sought clarification with regard to whether its building had a power generator. Similar clarification was not sought from Varsha.

Appearing on behalf of PPADB, Advocate Schalk Burger from South Africa sought to shed light on why Varsha was excluded in the later stages of the tendering process. He explained that having fallen by the wayside as the process evolved, there was no need to engage the company. He sought to explain bias towards Zambezi by giving an example. When Kebonang asked why a cheaper bidder with more space would be favoured over a more expensive one with less space, Burger’s answer was in the form of such example. In that example, he compared a new, gleaming and more expensive office building in the centre of town with an old and cheap building in a less prime location. In such instance, the advocate told the court, it would make perfect sense for a client to opt for the former over the latter.

Momene’s letter asked Zambezi if it would consider reducing the price it had quoted. Kebonang said that this amounted to “shifting the goal posts after the tender had closed.” Pushing back against the price renegotiation charge, Burger said that “it would be strange for the parties to sit around a table and one says, ‘I really want to give you a better deal but I can’t’.”

One interesting if peculiar dimension of the matter is the dissonance between the Attorney General and PPADB’s cases. Traditionally, government institutions march in lockstep to and from the High Court and while Burger sought to defend the offloading of Varsha from the tendering process, he differed with Motsumi with regard to PPADB’s involvement in such process. According to the latter, the Board was consulted at certain points along the way but Burger contends that is not the case. What makes the government’s case difficult in that regard is that while such consultation may indeed have happened, there is nothing in the court record to back that up.

Varsha is the applicant in the matter, the Attorney General (procedurally) the first respondent, PPADB the second and Zambezi the third. The latter ended up scoring higher marks than Varsha but questions are being raised about how that happened. In Kebonang’s determination, Zambezi should have been disqualified in the earlier stages of the tendering. Varsha offered more space than Zambezi and at a cheaper rental while the latter quoted an “above-market rate” for a building with defects. Members of the MTC (two of whom the judge named, one by first name only) gave Zambezi higher marks. During a fit-for-purpose inspection, it was found that the Zambezi building had a number of defects. While expressing concerns about the latter, the MTC, which is a PPADB sub-committee, recommended Zambezi as the preferred bidder.

With an impression thus far created in his mind, Kebonang asked both advocates if he could refer the Deputy PS and the MTC to the DCEC. This particular issue is cast in this context because it is not part of the prayers that are being sought. Peter, who said that the tendering process has an “aura of corruption” said that the court could indeed refer the matter to the DCEC. Conversely, Burger argued that doing so would be improper because it was not being asked to do so.

“Your Lordship will not make a finding on corruption because there is no application to that end,” he said.

What finding the court ultimately makes on this particular issue will depend on other elements of the case. Varsha wants the court to review and set aside the MTC’s decision to recommend Zambezi as a preferred bidder as well as to open talks with its management with a view to proceeding with the tender. Peter asserted that his client is neither “trying to steal the tender through the court” nor “asking for the court to award the tender.”

“The only company to negotiate with is Varsha because it is offering the right amount of space and is cheaper,” he said closing his argument.

Justice Kebonang did not commit to a definite date saying only that judgement will be delivered on or before August 26 after the court returns from its traditional July recess.

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