Thursday, July 7, 2022

Mystery in BR, Transnet deal deepens

Fresh information has emerged showing discrepancies and conflicting details in the financial transaction relating to the multi-million Pula business deal between Botswana Railways and Transnet Engineering for the purchase of 37 new passenger coaches.

Investigations by  Sunday Standard have turned up “confidential” Botswana Railways-Transnet Engineering documents which raises fresh questions over the financial transactions and creates an impression that the two state owned enterprises are holding back some uncomfortable and important information. 

The documents reveal that the total contract  price for the supply and delivery of new passenger coaches and supply of services as per the signed agreement between Botswana Railways and Transnet Engineering dated 15 September 2015  is P278 million-a stark contrast  to the figures publicised by  authorities from the two entities that the tender  is worth P250 million.

It also emerges in the documents that Botswana Railways has since paid Transnet Engineering P83, 628,260.70 (Eighty Three Million six hundred and twenty eight thousand two hundred and sixty Pula and seventy Cent) and the payment was made on the 9th March 2015.

 The documents, a copy (marked non-negotiable copy) which has been passed to Sunday Standard show that the P83 million payment was a 30 percent of the total contract price (contract CS_LS_KPL_AGM_076) being (P278, 760, 869.00).

The latest revelation raises questions about the accuracy of the figures on the total contract price and the ones that Transnet and Botswana Railways had earlier on shared with the media.

Responding to earlier Sunday Standard queries, Transnet spokesperson Mboniso Sigonyela had indicated in an email that “Transnet won the R250 million contract following a competitive bidding process with established manufacturers in which it excelled on technological innovation; delivery schedule; and pricing. The contract is for the supply of new coaches with new components without exception.”

Sunday Standard sought to establish why there were discrepancies on the figures that were provided by Transnet when responding to our subsequent inquiries and the figures on the documents in our possession and whether there was a variation clause in the contract that could have resulted in the apparent discrepancies in the two figures.

Falling short of backtracking on his earlier response, Sigonyela said in a follow up email response; “it is not our policy or practice to confirm details of price agreements with our customers. This is due to our efforts to protect commercially-sensitive information in a competitive environment.”

He added that “The amount you refer to (P278, 760, 869.00) is rounded up. Should you wish to confirm the exact number, please feel free to seek clarity from Botswana Railways.”

Sunday Standard had further sought clarity on why in its earlier response to Sunday Standard ‘s questionnaire, Transnet had stated that the total contract price is R250 million while one of the document passed to amaBhungane and signed by Transnet Senior Executive Accountant, Omphile Maotwe and addressed to Botswana Railways shows different figures.

According to the letter signed by Maotwe, dated 02 November 2015, and addressed to Botswana Railways Procurement Manager Mookodi Mogwera, the total contract price is P278, 760,869.00.

The latest conflicting accounts have stoked speculations that the two companies could have inflated prices, flouted the tendering practices and this is part of a recent wider investigation by the Directorate on Crime and Economic Crime (DCEC).  There are even claims that the reason why there are conflicting figures is because some of the money was used to pay the middleman who was engaged to broker the deal.

Sigonyela denied that there was a middleman involved in brokering the multi-million deal. He would not also respond to allegations that some senior executive management officers from Botswana Railways were last year taken to Cape Town as part of their holiday gravy train and the expenses were paid for by Transnet.

Responding to Sunday Standard’s questions, DCEC spokesperson Phakamile Kraai confirmed that “DCEC is investigating the Botswana Railways and as investigations are still ongoing we cannot comment further.” It has also emerged that DCEC has since confirmed that it had interviewed Transnet executives.

There are also claims that some board members have also been awarded tenders from Botswana Railways suggesting that they may have failed to raise the red flag because they were conflicted.

“They have been shutting one eye and winking with the other; some could not raise the red flag without perhaps implicating some of their own or themselves,” a source said when describing the alleged conflict of interest.

Botswana Railways Board Chairman, Modise Modise declined to comment demanding that questions be routed through the parastatal’s public relations department. 

Botswana Railways Board Deputy Chairperson Satar Dada explained that, “I’m the Deputy Chairperson of the Botswana Railways Board. I Chair the finance committee and what I can tell you is that this was a direct deal, in other words there was no middle man who brokered the deal,” said Dada.

According to Dada, the tender was advertised and some companies showed interest, “but we settled for Transnet because it had the idea of the coaches that we were looking for.” He added that there was transparency in the manner in which the tender was awarded “and everything went well” adding that it was sanctioned by the board.

Asked to explain the apparent discrepancies in the figures publicized by the two entities, Dada declined to comment on the matter and referred further queries to Ntwaagae. “Ask Dominic (Ntwaagae) the exact figures,” he said. Despite concerted efforts, Ntwaagae on the other hand, seemed reluctant to share information on the matter as he had not responded to a questionnaire sent to him through the PR Manager Kebabonye Morewagae more than a month ago. 

Asked if they were not involved in the tendering process and award of the tender, Public Procurement Asset Disposal Board (PPADB) spokesperson Ditapole Tsheboeng said her organisation “was not involved at all in the Botswana Railways tender in question as all Parastatals handle all their tenders irrespective of value.
Approvals of such tenders are made by Parastatal Boards.”

But she explained that “It is important to note is that all Parastatals and Entities receiving contributions from Government are obliged by law to adhere to the requirements of the PPAD Act and Regulations.”

Transnet Engineering has delivered the first batch of 22 passenger coaches to Botswana Railways (BR). The order is part of Botswana Railway’s purchase of 37 coaches. 

According to Sigonyela, Transnet Engineering will deliver the remaining 15 coaches by May this year.
Sigonyela’s version that some of the components were not new corroborated reports from the media that Botswana Railways Chief Executive Officer Dominic Ntwaagae allegedly confessed during a meeting with the Botswana Railways board that some of the components were not new.

Sigonyela explained that Botswana Railways wanted the coaches ready for use before the end of March 2016. He said this gave Transnet only five months to manufacture.

“To accommodate Botswana Railways’ wishes, the parties agreed that Transnet should lease refurbished bogies at no cost to the customer while the company manufactured new ones. This is a temporary measure. It takes 12 months to manufacture the bogies and we will deliver before the end of this year,” he said.

But sources are reported to have said it was never revealed to the Botswana Railways board that Botswana Railways had acquired trains with refurbished bogies.

On allegations that some of the components that were used to manufacture the coaches were sourced from reputable manufactures that Botswana Railways had rejected during the tendering process, Sigonyela said “The components used to manufacture the coaches were sourced new from various suppliers following Transnet’s procurement processes, policies and procedures.”

Sigonyela added that “We do not know about bidders who failed to win the tender. The components used to manufacture the coaches were sourced new from various suppliers following Transnet’s procurement processes, policies and procedures.”
He said a delegation from BR visited the Transnet manufacturing facilities in Salt River, Cape Town and Koedoespoort, east of Pretoria, to witness production of the coaches.

“The delegation comprised Botswana’s Minister of Transport and Communication, the Chairman of the Board, CEO and management of Botswana Railways. This happened in December and January, and was intended to assess progress in the manufacturing of the coaches. There were technical and engineering teams from BR who monitored and signed off at critical points of manufacturing. They also signed off at key and critical agreed milestones of production as part of the agreed quality control process,” he said. 

RELATED STORIES

Read this week's paper