…as Phaks JV is booted out
…And SA contractor roped in
Mohloai Mpesi
THE construction of the corruption riddled Ha Belo electricity substation in Butha-Buthe, initially budgeted at M86.6 million, is now expected to cost more than M170 million upon completion, effectively doubling the original project cost.
It has emerged that the Ministry of Energy has directly engaged South African electrical engineering firm Actom (Pty) Ltd, which will be paid M49,720,215.42 to complete the remaining works.
This development follows the termination of the contract with the long-serving Ha Belo contractor, Phaks Joint Venture (Phaks JV), which the ministry now deems incapable of completing the project despite having awarded it the tender in the first place.
The project had been riddled with allegations of massive corruption with monies paid to the now ousted contractor but with not much work done.
The Energy Ministry had awarded Phaks JV the contract on 18 August 2021 for the construction of the Ha Belo 33/11kV substation and 33kV line (Project LS-LEC-190007-CW), with a completion timeline of 18 months. Work commenced in November 2021 and was expected to end in April 2023, under the initial budget of M86.6 million. However, costs later ballooned to M121,577,004.21, yet the project remained incomplete.
The project was divided into three key components; installation of a transmission line from Ha Mopeli to Ha Belo, installation of a transmission line from Hlotse to Ha Belo, and construction of a power substation at the Ha Belo industrial site.
The Ha Belo electrification project, which forms part of the World Bank-funded Lesotho Renewable Energy and Energy Access Project (LREEAP), aims to increase electricity access in peri-urban and rural areas to drive economic development. LREEAP also seeks to establish a sustainable framework for rural electrification through mini-grids in remote regions.
The government refunded M22 million to the World Bank in June 2025 after it failed to account for for the money intended for the Ha Belo electricity substation.
The whole project had been mired in corruption with monies meant for the project having been allegedly siphoned out with no actual work done.
The Ministry of Energy’s Principal Secretary, Tankiso Phapano, has since distanced himself from the Ha Belo corruption saga.
In March this year, Mr Phapano clarified that the contract for the project was signed in August 2021, with work commencing in the same month. However, he only assumed his role as Principal Secretary in January 2024. He said he was not part of the team that signed the contract or managed the project’s finances and was only briefed about the situation during his first week in office.
His predecessor, Themba Sopeng, was in January this year charged with corruption, embezzlement, and money laundering at the project. The Directorate on Corruption and Economic Offences (DCEO) said Mr Sopeng unlawfully and intentionally engaged in corrupt practices in June 2021 by “misusing” his role as chief accounting officer within the Energy ministry by facilitating the award of the tender to Phaks JV without adhering to proper procurement processes.
Mr Sopeng was charged alongside Binare Ramochele, Mookho Pule, ‘Mathapelo Silase, Neo Lekhotla, Motsekuoa Phalole, Teboho Mokhethi, Makhabane Leluma, Mojaki Lesenyeho and Mookho Pule and other representatives of Phaks JV who allegedly played various “criminal” roles in the project.
In June this year, Prime Minister Sam Matekane announced that an additional M50 million would be required to complete the project.
Now, the government has roped in Actom, which had initially been subcontracted by Phaks JV as the manufacturer of project equipment.
According to a copy of the new contract seen by this publication, the Ministry of Energy entered into a M49,720,215.42 agreement with Actom on 20 September 2025, signed by Energy PS Tanki Phapano.
In a statement released yesterday, the ministry attributed the cost overruns to mismanagement and poor administration of the project.
“The project ended up surpassing the agreed budget because of bad administration. It was discovered that the contractor was paid money he did not deserve,” the statement reads.
“The contractor was paid to procure all project equipment, but only a small portion was delivered and installed. Only limited transmission line works were completed between Ha Mopeli and Ha Belo, and between Hlotse and Ha Belo. Because of this, the project stalled in 2023 after funds were depleted.”
The ministry further stated that efforts to renegotiate with Phaks JV from early 2024 failed to yield progress.
“The ministry decided to pay for the equipment that the contractor had failed to procure from the manufacturer, as it was about to be auctioned.
“It was agreed that the equipment would become ministry property, and the manufacturer would take over completion of the works left undone by Phaks JV. Based on this agreement and contract provisions, the ministry terminated the initial contract and allowed the manufacturer to complete the project,” the statement continues.
Efforts to contact PS Phapano for comment were unsuccessful as his phone rang unanswered.
A source close to the development confirmed that Actom is now likely responsible for completing the project.
“It has been awarded to Actom, because they were already supplying transformers as subcontractors to Phaks JV. It makes sense for the ministry to go directly to them now. There was still a lot of work outstanding — the entire substation was incomplete,” the source said.
“It’s better to replace a contractor who fails to deliver, especially one who acts as a middleman with no technical expertise. They did not have the capacity to handle that project from the onset. The project wouldn’t be completed without involving the actual manufacturer.”
