Tuesday, May 18, 2021

PPADB mum on legality of Morupule A tendering process

More than a month after Sunday Standard requested the Public Procurement and Asset Disposal Board (PPADB) to explain public procurement law as relates to circumstances in which the Ministry of Minerals, Energy and Water Resources (MMEWR) introduced an unsolicited bid into a solicited-bids process, a response has yet to be tendered.

This relates to a case in which a South Korean company called Doosan Heavy Industries and Construction got to participate in a Botswana Power Corporation (BPC) tender for the refurbishment of the Morupule A Power Station in Palapye. Having been put out of service in 2011, this power station is being demothballed to mitigate the power crisis occasioned by the continual dysfunction of the Morupule B Power Station next door. Initially, four companies bid for the job but all tenders were subsequently nullified, leading to a second round of tendering in which only two companies (Mitsubishi Hitachi Power Systems Europe Service and SK Engineering & Construction) participated. Midway through the re-tendering process and much to the consternation of the two companies, Doosan submitted what MMEWR has described as an “unsolicited bid.” Mitsubishi and SK are now out of the running and it is the Doosan bid that is being actively considered.

Following a story that Sunday Standard did on this issue and feeling “obliged to brief the nation, through this august house, on the facts surrounding the refurbishment of Morupule A project” the Minister of Minerals, Energy and Water Resources, Kitso Mokaila, countered some details of this story on the last day of the winter session of parliament. The story had stated that while the four companies that tendered the first time were allowed access to only one turbine (an assertion that our sources still stand by), the minister countered by asserting that “there were no restrictions on which parts of the plant to access.” In justifying why an unsolicited bid was entertained in a solicited-bids process, Mokaila said that the former could not be ignored in the wake of the challenges being faced at the Morupule B Power Plant: “It was decided that the ministry was to 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 process.” The latter will strike some as a logical fallacy because MMEWR and BPC is one and the same thing and the procurement process was for the same project. Effectively, therefore, there was a parallel procurement process.

The minister told parliament that MMEWR put measures in place to ensure that the Doosan offer never prejudiced the BPC tendering process.

“The proposal from Doosan was sealed and was only opened and handed over to BPC after the BPC tender did not result in a positive outcome,” he said.

This case has serious and far-reaching legal implications. If what MMEWR did was lawful, then all other ministries and government departments should also be able to do the same thing. By the same standard that allowed Doosan to come into the picture, the Ministry of Health, which handles life and death situations round the clock, should also be able to introduce unsolicited bids in the process of a solicited-bids process to offset medication supply challenges it faces at its health facilities. In the final analysis, a tendering system where the two processes are mixed would cause confusion, compromise the integrity of the public procurement process and render the Public Procurement and Asset Disposal Board Act impotent.

The premise of our story was that accepting Doosan’s bid was unlawful. Conversely, the purpose of Mokaila’s statement to parliament was to invalidate such premise and assert the lawfulness of his ministry’s action. As a custodian of public procurement law, PPADB would be useful in providing guidance on this issue. That was the basis upon which Sunday Standard asked PPADB to state whether the manner in which Doosan came into the picture was lawful. We also asked the Board to state if, in the event that the Public Procurement and Asset Disposal Board Act was contravened, what would the penalty be and on whom would such penalty be imposed. Such request was made on July 28 but at press time (Friday), we had fruitlessly waited for PPADB’s response for a length of time long enough to accommodate four complete cycles of its own turnaround time for media queries.

Fortunately though, we were able to get legal opinion on the matter from within the Government Enclave. To Mokaila’s insistence that the manner of engaging with Doosan was above reproach because its bid was opened only after the solicited-bids process had run its course, a very senior lawyer within the government system says that it is unlawful to even have accepted that bid.

“Legally, you can only consider an unsolicited bid when no bids have been solicited. In this particular case, bids were solicited and under such circumstances, only solicited bids are supposed to have been considered,” the lawyer says.

Concluding his statement to parliament, Mokaila asserted that whatever his ministry did was aimed at bringing Morupule A into service “in as short a time as possible to mitigate the load shedding that is afflicting our country.”

Lahmeyer International, the owner’s engineer that BPC engaged for the Morupule A project, also addressed the time aspect but in a context that seems diametrically opposed to the minister’s. On evaluating the formal re-tender (SK and Mitsubishi’s), Lahmeyer was confident about “a commercially viable project outcome” and it recommended that BPC should “consider only these two tenderers.”

“Limiting the process to these two bidders only without starting a completely new tendering process would allow implementing the project within the shortest possible time frame,” Lahmeyer says in its final re-tender evaluation report which, in another part, recommends that SK and Mitsubishi should be invited to submit alternative bids.

However, the end result of the formal tendering process was for the government to disregard expert advice (Lahmeyer’s) that it is buying at millions of pula. As all this drama plays itself out, the power supply situation remains precarious because BPC’s loadshedding has evidently taken on the behaviour of a Dstv movie: if you saw one four years ago, it is reasonably certain that you are still it seeing it again and again and again.


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