THE Directorate on Corruption and Economic Offences (DCEO) has begun investigations into the grossly inflated M2, 8 billion deal awarded by the government to a Chinese contractor for the building of a 70-megawatt (MW) solar power generation project at Ramarothole, Mafeteng.
The deal, awarded during the time of the previous Thomas Thabane-led government, has now been inherited by the current Moeketsi Majoro-led government after the collapse of the Thabane administration in May this year.
According to well-placed government sources, the DCEO wants to establish if the deal awarded to Chinese contractor, Sinoma Tbea Consortium, was above board.
The DCEO investigations come against the background of last month’s exposé by the Lesotho Times of a massive scandal in which some senior officials in the Thabane administration, including former Energy and Meteorology Minister Mokoto Hloaele, are said to have agreed to the bloated deal with Sinoma Tbea in exchange for bribes.
Mr Hloaele is alleged to have received a sizeable bribe along with former First Lady ‘Maesaiah Thabane and others to facilitate the deal.
Mr Hloaele denies any wrong-doing and says his hands are clean. He has instead challenged current Development Planning Minister Selibe Mochoboroane to explain how Lesotho agreed to the deal, saying it was Mr Mochoboroane and not him who signed the cooperation agreement for the project with Sinoma Tbea Consortium.
He said the solar power deal was initially agreed with Sinoma Tbea during the tenure of the Pakalitha Mosisili-led seven parties’ government when Mr Mochoboroane was energy minister in 2016.
He said a financing agreement for the project was agreed during the time of the Thabane administration when current Prime Minister Moeketsi Majoro was still finance minister.
Even though financing agreement was signed by Dr Majoro, he was merely approving figures which had been suggested by Mr Mochoboroane, Mr Hloaele said.
Therefore, Mr Mochoboroane is better placed to explain why the project cost that staggering amount, he said. He disputed the M2, 8 billion amount, saying to the best of his knowledge, it would only cost M1, 8 billion. He said this could be verified with the energy ministry.
Well-placed sources in the solar power generation industry last month told this publication that it costs US$1 million (about M16, 29 million) for the infrastructure to produce 1MW of solar power yet the government had agreed to an inflated cost of US$2,5 million per 1MW. This means instead of paying US$70 million (about M1, 1 billion) for the Ramarothole project to produce 70 MW of electricity, the government will in the end pay US$175 million (about M2,8 billion), a huge rip off of poor Basotho.
Despite the massive cost implications, the project is going ahead. More than US$70 million has already been approved by the China EXIM Bank to finance Phase I of the project which will produce only 30 MW of power daily. But considering that it costs US$1 million to produce 1 MW of power, this money would have been enough to construct the entire facility.
Energy and Meteorology principal secretary, Themba Sopeng, last month told this publication that “it is true that there is such a project and government has established the LEGCO to oversee the project”.
And in a new turn of events, the DCEO has begun investigations to establish if the deal was above board. It has emerged that shortly after the publication of the Lesotho Times story, DCEO director general Mahlomola Manyokole wrote to Mr Sopeng asking him to furnish him with documents and other information pertaining to the deal as part of the anti-graft body’s probe
DCEO spokesperson ‘Matlhokomelo Senoko this week refused to shed light on the issue, saying, “We cannot confirm or deny anything because we no longer comment on any ongoing investigations if there are any”.
However, the Lesotho Times has seen a copy of a letter Mr Sopeng wrote to Adv Manyokole concerning his request for information about the solar deal.
Although Adv Manyokole was not reachable to shed light on the information he had requested, it can be inferred from Mr Sopeng’s response that the DCEO boss wanted to know what role the energy ministry played in securing the deal, how the loan deal for the project was financed, how the government settled on Sinoma Tbea Consortium and if at all a feasibility study had been conducted before the project was agreed.
In his response to Adv Manyokole’s inquiries, Mr Sopeng states that the deal was approved by cabinet. Like Mr Hloaele, he says that the financing agreement was concluded by the finance ministry and not by the energy ministry.
“With reference to (your) request in your letter, we herein provide the said document in electronic format,” Mr Sopeng states in his 30 November 2020 letter to Adv Manyokole.
“However, it is important to advise that the contract between the Government of Lesotho and EXIM Bank of China was dealt with as a matter of responsibility by the Ministry of Finance. It is on that note that we advise that any further clarity and/ or information regarding the same document/contract should be referred to the Ministry of Finance’s Debt Department.
“The engagement of the contractor was approved by the Government of Lesotho, through cabinet. It is worth mentioning that this project is a collaboration between the Government of Lesotho and Government of China, facilitated through the Forum on China-Africa Cooperation (FOCAC).
“The project is under FOCAC, such projects are coordinated by the Aid Department under the Ministry of Development Planning. The facilitation in this case would have therefore been of a tripartite nature between the Ministries of Development Planning; Energy and Finance.”
Mr Sopeng explains that the Ministry of Development Planning’s role was to coordinate and monitor engagements with the Chinese government under FOCAC, while the Energy and Meteorology Ministry had the task of “housing and implementing the project”. He said the Ministry of Finance negotiated and concluded the financing agreement with EXIM Bank of China.
Mr Sopeng also states that a feasibility study was undertaken before the deal was concluded and he promised to provide the DCEO boss with a copy of the study in electronic format “due to its size”.
It also appears that Adv Manyokole put it to Mr Sopeng that his ministry went ahead with the project despite being advised against it.
In reply, Mr Sopeng states that, “The Ministry of Energy and Meteorology is not aware of such advice against this project”.
“The project was approved by the cabinet of the government of Lesotho and the approval included for negotiations and signing of the agreement between the government of Lesotho and EXIM Bank of China. Documents of relevant approvals will form part of the electronic documents provided (to the DCEO),” Mr Sopeng states.
According to ‘Mathabo Mahahabisa, the chief accounting officer of the newly formed Lesotho Electricity Generation Company (LEGCO), which is overseeing the project, the government will pay US$70 million for phase 1 of the project which is expected to produce only 30 MW of electricity.
However, experts in the solar industry say US$70 million should be for the production of 70 MW instead of a measly 30 MW. They say the grossly inflated deal will plunge the country into years of unnecessary debt.