Wednesday, August 10, 2022

State, BDC parry attempts to halt Botswana Innovation Hub

The embattled Botswana Development Corporation (BDC) will on Friday square up against contractors suing the company for fraudulent/ unprocedural/ unlawful, unreasonable and irrational awarding of contracts in the Botswana Innovation Hub project.

On Friday, Lobatse High Court judge Justice Isaac Lesetedi will preside over arguments between BDC and contractors who have applied for the suspension of works in the development of the P658 million Botswana Innovation Hub (BIH) project at Plot 69184, Block 8 Gaborone. The revised cost of the project initially estimated to cost approximately P350 000 000 currently stands at over P658 807 968.

Last year, Justice Lesetedi made a “temporary ruling” freezing developments in the Quantity Surveying and the Civil and Structural components of the project pending the hearing of the urgent application. The BDC board tender committee decision of 24 November 2010 awarding the quantity surveying consultancy services for the BIH project to Puma Mathware has pitted the embattled organization against losing bidders who insist that the tender was riddled with fraud. The Joint venture of Mmile Mhutsiwa & Associates and Davis Langdon (Pty) Ltd are contesting the award of the Quantity Surveying professional aspect of the project to The Fitzwilliam Partnership (owned by Mathware) while Bergstan Africa is challenging the award of the Civil and Structural component to Pula Consultants.

In the urgent application, to be heard next week, the contractors want the BIH works suspended pending a ruling over the main application in which they want the award of the tenders reversed/ reviewed, citing irregularities in the adjudication process.

In affidavits filed by respondents towards the end of 2011, BDC – who are implementing the BIH project on behalf of Botswana government, have asked court to throw out the review application. BDC, through their lawyers Collins, Newman & Co, will raise preliminary points against the urgent application at next week’s hearing in Lobatse. An answering affidavit by one Boitshwarelo Segola- (BDC Principal Officer Engineering Projects, Property Division), says the matter is not urgent because the affidavit filed by Dithologo Mhutsiwa (Mmile Mhutsiwa & Associates) and Frederick Selolwane (Davis Langdon) does not set forth explicitly the circumstances in which they aver renders the matter urgent, since they had been aware of the BDC decision since 10 January 2010. Despite knowing about BDC decision, they failed to pursue any legal relief before court until launching the review application on 16 June 2011.

“The interdict on urgency as set out by the applicants is fatally defective for being one of self-created urgency. The granting of the interdict would be entirely contrary to the balance of convenience relating to the parties,” he said.

Segola argues that the project is already at stage three and an interdict at this stage would cause delay to the entire project causing a ripple effect that could cost the tax payer millions of pula. He further posits that prolonging the completion would increase costs of labour, materials and expose BDC to potential damages claims from other parties linked to the construction of the Innovation Hub, e.g. for the unexpired portion of the contract.

The other parties are:
Contractor Services Cost (Pula)
Pula Consultants Civil and Structural Engineers 6 591 860.00
North Atlantic Mechanical Engineers 5 548 968.50
Systems and Services Engineers Electrical Engineers 2 777 482.50
Shop Architects PC Architects 15 000 000.00

The project has been running for eight months and various stages have been completed and payments made to The Fitzwilliam Partnership in the sum of P 915 565.99 in fees for stage 1 and 2 of the total P12 207 546.40.

BDC lawyers will argue that the applicants have failed to establish the requirements for an interim interdict in that they have failed to establish that they will suffer irreparable injury which is not capable of remedy by a damages claim or that they do not have an alternative and or ordinary remedy.

“To interdict Fitzwilliam from performing any work pending the final determination of the review application would cause irreparable harm to the respondents in general and the government of Botswana in particular,” said Segola, maintaining that the decision to appoint Fitzwilliam was well reasoned with no element of impropriety, fraud or any element of unreasonableness in the thinking behind the decision to warrant court to review the decision.

In reply, Mhutsiwa and Selolwane express shock that although Segola and Ramokate were part of the tender evaluation team that recommended the award of the quantity surveying contract to them they have deposed an affidavit to the contrary. They said contrary to their assertion it is entirely appropriate for court with jurisdiction to review and set aside a tender award if proper procedures were not followed or external factors utilized to deny a party an opportunity to be awarded the tender

The applicants submit that BDC Board misunderstood the terms of reference (ToR). They contend that the decision by the board was based on a consideration already taken care of at the evaluation of tender submissions and also based on consideration which was never stipulated as criteria in the terms of reference. There was no citizen ownership of companies component in the ToR. The citizen empowerment requirement in the ToR relate to citizen staffing component in the project team instead. Even if citizen ownership was to be considered in the manner that the Board did, it should have been guided by Government of Botswana Citizen Empowerment Policy which only relates to a price differential discount extended to bids by citizen contractors, they argue.

“It appeared that the Board was blowing hot and cold at the same sitting as the same reason used to deny the applicants ‘the award was not used to deny Pula consultants bid in the Engineering component of the project. The same criterion was not applied to Fitzwilliam who also has a project with a BDC subsidiary as a result of which it appears that the criterion was not applied lawfully, reasonably, equitably and consistently,” the applicants note.

They argue that the Board cannot simply deviate from the recommendations in the Tender Report by the evaluation team of experts from BDC, instructing ministry and external consultants without lawful reason or showing that the process followed in the evaluation were flawed. The Board has not advanced any. Further, the applicants point out that potential harm to the project indicated by BDC is grossly overstated because the Quantity surveying component of the project can be undertaken in retrospect, as has already happened in stage 1 and 2

To discredit the applicants, the respondents have also enlisted Mathware’s Secretary Tiny Chifedi who has deposed a supporting affidavit wrought with typos/ typing and grammatical errors, and incomplete sentences which makes a hard reading. Chifedi, a secretary at Fitzwilliam Partnership alleges that sometime in February 2011 Boyce Mhutsiwa visited her at her house in Mogoditshane where he enquired if her boss (Puma) Ogaketse Mathware maintains any communication with Odirile Merafhe (then chairman of BDC board tender committee) and Maria Nthebolan (Managing Director of BDC). She alleges that Mhutsiwa told her that Merafhe had corruptly awarded a Mmile Mhutsiwa & Associates tender to The Fitzwilliam Partnership, but claims that she declined to discuss office related issues involving her boss with friends.

Though signed by Chifedi under oath, part of her affidavit appears to have been written by Mathware where it reads: ”Chifedi told me further that she told Mhutsiwa that it was inappropriate for Mhutsiwa to expect her to discuss issues of my friendship with him, on matter that are office related given that I am Chifedi’s boss. My view is that Mhutsiwa acted unprofessionally by enquiring about what transpires during adjudication and tender award proceedings when it (sic) knows that, proceedings of such meetings are closed to the public and tenderers”. Mathware further said his company has never secured a tender through corrupt or illegal means and always follow the correct tendering process. Chifedi also “confirms” the prejudice that government will suffer should the project not continue.

BDC Manager Legal- Jennifer Dube and Letsweletse Ramokate- BDC Property Manager have also filed affidavits corroborating Segola’s arguments. The PS at Ministry of Finance and Development Planning Solomon Sekwakwa and Jeff Siamisang -Deputy PS at Ministry of Infrastructure, Science and Technology have also deposed confirmatory affidavits in support of the BDC arguments that government will suffer prejudice if the project is suspended. Already several months have elapsed since Justice Lesetedi made a temporary order in 2011 suspending work on the components of the BIH project challenged in court.

How it all started

After conception the Innovation Hub fell in jeopardy of collapsing due to the budgetary constraints within government. BIH then approached BDC to assist in raising funds for the project through inviting investors into the BIH Property Company. Initially BIH had specified that BDC should raise funds by way of raising a bond. None of the eight merchant banks and consultants invited to tender for the appointment as transaction lead advisors expressed interest. The potential transaction lead advisors believed that chances of success in raising equity for BIH were remote and were not convinced that there was a business model that they could sell to potential investors. The consultants further cited lack of capacity at the time and lack of clear understanding of the BIH project as the main impediments.

In July 2010, the BDC board tender committee approved management’s request to engage with potential transaction advisors on a one on one basis to provide more information and answer queries regarding the BIH project and its funding needs. Ten consultants and merchant banks were invited to meetings to discuss the terms of reference in the earlier tender attempt. Of the seven proposals received from consultants offering corporate finance services Deloitte, KPMG and Fleming Asset Management were shortlisted. The assignment for the assessment, recommendation and sourcing of funds for BIH project was awarded to Deloitte at a maximum fee of P6 million.

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