Govt faces lawsuit over M900 million deal
A COMPANY which the government recently awarded a lucrative M900 million road construction deal was once placed on the World Bank’s 2011 corruption and fraud blacklist.
This has raised fears that Ministry of Public Works and Transport is not conducting adequate due diligence checks on foreign companies before awarding them jobs.
The ministry recently awarded China Geo Engineering Corporation (CGEC) a deal for the construction of the Monontša-Marakabei Road without an open tender process. The decision has sparked strong protests from the Consortium of Lesotho Contractors (CLC) which has since threatened legal action to halt the deal.
The CLC has also raised concerns that the government does not conduct due diligence checks to establish the bonafides of foreign companies.
A report carried in the South China Morning Post on 13 December 2011 states that CGEC was among 152 companies placed on a corruption and fraud blacklist by the World Bank.
Of these, 49 were British companies, 38 were Bangladeshi, 37 from Indonesia, 17 from the United States and 11 from China.
“The bank has taken a major step towards greater transparency and accountability by authorising the publication of decisions in new sanctions cases,” former World Bank President, Robert Zoellick, said of the blacklist at the time.
Public Works and Transport Principal Secretary, Mothabathe Hlalele, said he was not aware of such information.
“What I only know is that they have worked on different projects in the country where they have been doing a very fantastic job. It is my first time to hear that they have been blacklisted by the World Bank…I want to believe that the Roads Directorate has done background checks on this company because they have massive experience in such matters.”
The CLC has furiously protested the government’s deal with CGEC.
Part of the CLC’s letter to the government reads: “The CLC and its members being very diligent in looking for construction tender opportunities in the press and media as a whole, do not recall seeing the advertisement of this project in any of the weekly newspapers”.
CLC Executive Director, Retšelisitsoe Motlojoa, told the Lesotho Times that they were still to receive a response from the ministry regarding the issue.
“We haven’t heard from the ministry and we hope they will respond to our inquiries before construction begins,” Mr Motlojoa said.
“Our stand point on this issue is very simple and clear. We just want to know which procedures were followed because the expectations were that this work will be tendered for and we were surprised to learn that there is a certain company that has been given the job without a tender process.
“Procurement guidelines need to be followed when jobs are given,” he said, adding that his organization was prepared to take legal action against the ministry to stop the construction.
Mr Hlalele has however defended the government’s decision to award the deal to CGEC, saying it was a collective cabinet decision which took several factors into account including his ministry’s past experiences with local contractors who performed shoddy jobs after being awarded tenders.
“Yes, I have that (CLC) letter in my office and I will soon meet them to explain everything. The decision to award the tender was made by cabinet.
“We are all aware of the procedures that must be followed when there are jobs but there are also exceptions like in this case. In fact it was the company (CGEC) that proposed to fund and build the road for us and cabinet liked their proposal.
“They will use their money to begin construction because the ministry does not have the money now and we will pay them over time,” Mr Hlalele told the Lesotho Times.
Mr Hlalele further said in addition to the Marakabei-Monontša Road, CGEC would also build another road from Taung in the Thaba-Tseka district to Mokhotlong.
“We actually have roads that were marked as our priorities in the five year period and these are tarred roads from Mafeteng to Mount Moorosi, Maqhaka to Hleoheng, Thaba-Tseka to Katse and Mositsaneng to Ha Tšepo. There will also be many gravel roads and we will also refurbish all the roads leading to Maseru town.
“We are open to proposals from different companies for all these roads and if a company proposes to use their own funds to begin construction on the understanding that we will pay them later, they will be awarded the job because the ministry currently does not have enough money to construct all these roads.”
Mr Hlalele said while they appreciated the CLC’s concerns, it was however, an indisputable fact that many local contractors performed substandard work which ultimately cost the government more in maintaining the roads.
“The other fact that we can’t run away from is that some of these local contractors perform substandard work and in the end this costs the government a lot more to maintain roads. So we needed to go for quality when awarding the tender. This was a direct directive from cabinet,” Mr Hlalele said.
Mr Hlalele’s stance on some local contractors seems to have merit however. The Lesotho Times once carried a report on a local contractor who was awarded a major road construction job but did such a shoddy that a section of the tarred road that contractor built split into two parts before washing off. The newspaper carried photographs of the shoddy work in graphic detail and the contractor threatened to sue notwithstanding his obvious unacceptable work.