The Minister of Minerals, Energy and Water Resources Kitso Mokaila told Parliament on Friday that though it is against his Ministry’s ethics to disclose contents of communication with stakeholders, he felt obliged in the public interest to explain why his ministry engaged Doosan Heavy Industries & Construction ( DHIC) to participate in the Morupule A refurbishment tender through the Ministry instead of through Botswana Power Corporation (BPC) which had floated the tender in 2013.
The Korean Company stirred controversy when unlike other bidders which had participated in two tenders floated by BPC, bypassed the tendering process by the parastatal and approached the Ministry for offers.
In a terse response to this paper’s inquiry as to why it did not participate in the BCP tender, the company stated that “Doosan Heavy Industries & Construction values all its customers’ opinions, regardless of the content.”
Mokaila explained that despite the fact that his ministry was aware Botswana Power Corporation (BCP) was running a tender process for the refurbishment of Morupule A power station; the ministry entertained an offer by Doosan outside the tendering process by BPC.
According to Mokaila, in the wake of the challenges being faced at the Morupule B power plant, the offer was not ignored. It was decided that the Ministry, would handle further enquiries as the BPC was already involved in another procurement process and it was inimical to the BPC procurement process to allow a situation where BPC ran a parallel procurement processes.
Mokaila told parliament that, on 28 November 2014 Doosan approached his Ministry and made an offer. In their proposal Doosan undertook to among other things bring back to service “3x 33 mw within 12 months after finalisation of the agreement.”
Doosan sought approval and it was granted by the Ministry to inspect the power plant, under the supervision of BPC. The offer was sent to BPC on receipt of a letter from BPC that their evaluation process for the tender bids was completed and a decision made not to proceeds with the offers. Doosan handed in their proposal on 18th February 2015 and sent to BPC on 24th March 2015. He said it was agreed to use the same team that evaluated the BPC tender. BPC/Lahmeyer (owner’s engineer) met Doosan for clarification meeting in Gaborone from 27 April to 30th April 2015.
“It was decided that Doosan revise its proposal to address issues raised. In this regard Doosan made a submission on the 29 June 2015 and is currently the subject of an evaluation by BPC and its Owner’s Engineer,” said the Minister.
Mokaila said that is his ministry’s letter dated 5 December 2014, stated in part that “as DHIC is aware, the Botswana Power Corporation (BPC) is running a tender process for the refurbishment of the Morupule A coal fired power station. Should this process not yield an acceptable result, other options would then be considered to realise the return to service of Morupule A power station.”
The letter further stated that “it is our understanding that all costs of the assessment will be borne by DHIC and the Government of Botswana in agreeing that DHIC undertake the assessment, does not thereby signify an intention to engage DHIC to carry out the refurbishment of the power station or enter any agreement relating to the refurbishment of the power station.”
The letter also added that “that the government of Botswana does not commit to favouring consider any proposal which DHIC may make following the carrying out of assessment irrespective of its attractiveness of otherwise.”
The letter further stated that “this does not preclude the Government of Botswana from entertaining proposals from other parties for refurbishment of the Morupule A power station.”
Mokaila said the ministry always communicated clearly that the Ministry or BPC was under no obligation to consider any proposal from DHIC and that any such proposal would only be considered after the BHC tender had run its course. Furthermore, Mokaila said, the Ministry and BPC are at liberty to pursue other options to secure power for the economy.
“…The Ministry was very much alive to the need to ensure that the procurement process by BPC ran its course which it did. I do however; concede by allowing Doosan to carry out an inspection whilst the BPC tender was running may be construed to mean running a parallel procurement,” said Mokaila.
He said the Ministry put measures in a place to ensure that the Doosan offer never prejudiced the BCP tendering process.
“The proposal from Doosan was sealed and was only opened and handed over to BPC after BPC tender did not result in a positive outcome,” said Mokaila.
He said whatever the Ministry did was aimed at bringing into service, through refurbishment of Morupule A power station in as short a time as possible to mitigate he load shedding that is afflicting the country. Mokaila said the tendering process which started in earnest on 18 October 2013 with the appointment of the Owner’s engineer has now been running for more than 18 months. He said reducing the offer by about P1 billion is unrealistic hence the need to explore other options. The Minister confirmed that Korea Electric Power Company and Doosan wanted to bid under the off balance sheet option but this was not to be.