Ministry of Lands Management, Sanitation and Water Resources top management and Public Procurement and Asset Disposal Board’s (PPADB) failure to listen to the advice from their Project Management Officers (PMOs) has come back to haunt them and has thrown the whole government into financial mess.
The two entities found themselves in the multibillion tenders which they withdrawn from China Jiangsu International after the advice of the Directorate of Intelligence Services (DIS) that the company is involved in massive corruption and are a threat to national security.
Last week High Court confirmed the fears of PMO when delivering judgment stating that the withdrawal of an award for the award of the tender for the Design, Supply and Build of Water Distribution Network, Sanitation, Reticulation, Telemetry and SCADA and other associated Works in Maun was illegal. Delivering judgment, Acting Judge Rahim Khan ordered that MLWS to issue a letter of notification of award to China Jiangsu International for the Maun Project immediately and forthwith.
This judgment came after MLWS advised PPADB to withdraw the awarding of the tender to the Chinese State company because DIS has indicated that they are involved in massive corruption and are threat to national security.
The withdrawal of the P1.5 billion tender didn’t sit well with the Chinese company who applied for an expedited appeal at the Court of Appeal whilst waiting for the review of the decision which was before Justice Khan. The Court of Appeal Justice Isaac Lesetedi dismissed the application with costs.
Immediately after the Court of Appeal, senior leadership at MLWS ordered the speedily re-awarding of the P1.5 billion Maun Water Reticulation project to the second bidder Zhengtai Group Botswana.
The PMOs then advised the ministry senior leadership that the matter is still before the court and insisted that they should first wait for the judgment on the review.
This was prompted by the statement made by Justice Dube and Khan that PPADB cannot rely on the mere correspondence from DIS in withdrawing the tender.
Dube stated that the information from DIS advising the procuring entities not to conduct business with China Jiangsu International could not be admissible in court because it was introduced outside the procurement process.
Justice Khan echoed the same statement when throwing confusion at the government enclave regarding the Maun Water project tender.
“The note by DISS which makes certain allegations without being substantiated is unacceptable as criteria to be considered in the evaluation process,” stated Justice Khan.
He said that PPADB has statutory obligations in terms of its mandate to fulfill and that it cannot transfer those responsibilities to a third party as this is not permissible in terms of the legislation.
“Its reliance on the note by DISS is entirely misplaced and therefore the contents of the note by DISS must be ignored as a basis for the rejection by the 1st respondent (PPADB) of the tender,” he stated.
Another concern for the PMOs is that the difference between the first bidder China Jiangsu and Zhengtai Group is P300 million, which they argue, doesn’t make economic sense for the ministry and government.
China Jiangsu International had won the tender to the value of P1.5 billion with Zhengtai Group coming second with a quote of P1.8 billion.
On the 21st December DIS Director General Peter Magosi wrote a letter to PPADB advising them to terminate all the tenders awarded to China Jiangsu International as their investigations have shown that the company is involved in massive corruption and threat to national security.
In February 2019 PPADB withdrew all the tenders awarded to China Jiangsu.
MLWS through Water Utilities Corporation (WUC) will soon find themselves in another predicament regarding the over P800 million tender for the design supply, installation and commissioning of the Mmamashia Water Treatment Plant-Tender No. WUC 015(2018). The tender was won by China Jiangsu International but DIS instructed WUC to withdraw the awarding of the tender to the state owned Chinese company. Lobatse High Court Judge Justice Tebogo Tau instructed that an International arbitrator be appointed to mediate on the matter.
Justice Khan smells rat
In delivering judgment on the Maun Water Reticulation project, Justice Khan hinted that the conduct of the respondents appeared to be employing tactics which will allow the case to drag on indefinitely whilst at the same time the contract is being implemented.
Immediately after China Jiangsu lost the appeal at the court of Appeal, MLWS is said to have instructed PPADB to sign contract with Zhengtai Group. The company was immediately given P180 million by MLWs as advance payment.
“That there has been substantial progress in the implementation of the contract so that this court should not reverse the progress made in implementation and that on a balance of convenience it would be preferable for the contract to continue rather than impede its implementation,” observed Justice Khan.
He said that it is clear that the implementation of the project whilst the matter is still before the courts was to try to ensure that the project even if the matter is appealed; a period of time will elapse and benefit MLWS.
“So as implementation would have occurred and the courts are reluctant to impede a contract where substantial progress has been made and it would not be expeditious to prevent their progress in a contract,” he said.
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