Tuesday, May 18, 2021

South Korean company gets controversial P65 million contract with BPC

With no tender being floated and against the advice of the Public Procurement and Asset Disposal Board, the Botswana Power Corporation has awarded a US$6.5 million contract to the South Korean company that was controversially brought into the Morupule A Power Station tendering process to conduct a feasibility study on the latter.

According to BPC sources, the deal was sealed quietly and the company, Doosan Heavy Industries and Construction, has already started work at the power station which is located in Palapye. While the deal is not for the refurbishment proper, a source says that Doosan is now suitably positioned to get the refurbishment job as well.

Doosan submitted an unsolicited bid at a time that BPC was considering solicited bids process to refurbish Morupule A.

Having been put out of service in 2011, the government plans to demothball this power station to mitigate the power crisis occasioned by the continual dysfunction of the Morupule B Power Station next door. In the final stages, the formal tendering process pitted Mitsubishi Hitachi Power Systems Europe Service against SK Engineering & Construction. However, both bids failed and Doosan has been in active consideration since.

In justifying why an unsolicited bid was entertained in a solicited-bids process, the Minister of Minerals, Energy and Water Resources, Kitso Mokaila told the last session of parliament 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.”

While Mokaila has insisted 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 have even 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.

 

In awarding Doosan the contract, BPC disregarded advice earlier tendered by the PPADB. Taking stock of the situation, SK complained to PPADB about the manner in which this tender was handled. The Board took the matter up with BPC which, according to a letter from PPADB, indicated that it was addressing the complaint within its internal structures.

 

“The Board advised BPC to suspend the tender progress whilst resolving the complaint in line with procedure,” says the PPADB letter which was signed by the Board Secretary, Masingoaneng Ramodimoosi.

 

In his state of the nation address last Monday, President Ian Khama seemed confident about the refurbishment taking off as planned.Concluding his statement at the last session of 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.”

 

However, industry sources say that before there is any refurbishment of Morupule A, there will be litigation that will certainly push the project take-off date back. Companies that tendered for the project reportedly spent millions of pula on that exercise alone. Inspection of the plant is said to have been a prohibitively expensive exercise that involved a great deal of logistical choreography. Armies of engineers had to be flown in from overseas, transported to Palapye and accommodated in costly hospitality establishments at the expense of the tendering companies. By one estimate, one company spent a total of P20 million just to mobilise its resources and prepare the tender documents.

RELATED STORIES

Read this week's paper