Govt seizes IEC budget to pay Bidvest
IN yet another controversial move, the government has seized M54 million from the Independent Electoral Commission’s (IEC) budget for local government elections to fund its highly contentious fleet services contract with Bidvest Bank Limited.
The decision to raid the IEC’s budget is likely to be seized upon as a gesture of vindication by those who have harshly criticised the government for entering into a contract with the South African firm without a competitive bidding process, as required under procurement laws, to determine the most cost effective option for any public service procurement.
IEC chairman Advocate Mahapela Lehohla is certainly not pleased with the decision to seize his organisation’s budget describing it as “inconceivable and shocking”.
But the government is standing its ground with the Ministry of Finance’s Principal Secretary Tom Mpeta saying it was well within his minister’s right to conduct such a budget re-allocation if circumstances demanded it.
Opposition parties and civic group have nonetheless expressed outrage at the government’s latest move in interviews this week. The money seized from the IEC will be used to pay Bidvest Bank Limited for bills incurred thus far in the provision of the vehicle fleet services. After the government initially awarded Bidvest a six month contract, it decided to extend its marriage with the South African company, signing a new contract hire agreement with Bidvest Bank Limited in August 2016 without an open tender process.
Bidvest was originally awarded a six month contract to run the government fleet from 1 October 2015 to 31 March 2016 after the expiry of the government’s fleet management contract with Avis.
On the basis of this arrangement, the government had promised to exclude Bidvest from its tender to find a new fleet management firm to replace Avis. However, the government cancelled the tender process, preferring instead to extend its original short-term deal with Bidvest into a long-term four-year contract. This was despite the fact that Bidvest had not bid for the tender as earlier agreed in light of its original six-month contract deal, also awarded without an open tender process.
The controversial government fleet tender has now saddled the coalition government with the lead coalition party, the Democratic Congress (DC), on the verge of imploding as its senior officials openly trade insults over the lucrative project. Some senior DC officials have accused Finance Minister Dr ’Mamphono Khaketla of corruptly administering the project.
In a savingram dated 8 August 2016 and titled “2016/17 M54,000, 000m Uncommitted Balances on Local Government Elections” the Finance ministry’s Principal Secretary Tom Mpeta notifies the IEC of the decision to withdraw the money from its budget to pay Bidvest.
The savingram was issued two days before the government entered into its 48-month contract with Bidvest. Mr Mpeta says the IEC would not need the money this year since the local government elections, which were scheduled for this month, were postponed to next year because they would have clashed with the 50th independence celebrations.
Part of the savingram, addressed to the IEC’s Director of Elections Dr Letholetseng Ntsike with a stamp of receipt by the commission dated 29 September 2016, reads: “Let me first thank you for the support your office accorded my officials on our request to you to provide the cash plan for the local government elections.”
“As per the submitted cash plan on August 2nd 2016, we looked into the plan and on the basis of the proposed expenditure pattern our two offices observed that the above mentioned funds will not be expended in the current financial year but will be spent in April 2017.
“On this basis, your good office is therefore advised that pursuant to section 27 (2) of the Public Financial Management and Accountability Act 2011, the Hon Minster of Finance has authorised the budget controller to withdraw the sum of M54, 000,000.00 from the said funds.”
Mr Mpeta states the M54 million would be used to settle bills accrued under the government’s short-term agreement with the South African firm.
Mr Mpeta adds: “The funds are going to be used to pay bills for short-term hire with Bidvest Bank Limited. Your good office is further advised to include this expense in the 2017/18 budget proposals. Let me thank you in advance for your usual understanding.”
Asked for comment, IEC chairperson Justice Mahapela Lehohla said the decision to withdraw the electoral body’s funds was “shocking and inconceivable”.
“That decision was not only shocking but inconceivable. The IEC’s money should never be touched. Elections are a continuous process and need funds on a continuous basis,” he said.
“We always have by-elections due to vacancies in parliament for whatever reasons, and that is why it is imperative to have funds readily available. What is this Bidvest thing they are talking about?”
Also contacted for comment, Dr Ntsike said the IEC would make its pronouncement on the issue today.
But the government has defended the move with Mr Mpeta telling the Lesotho Times, last night that Dr Khaketla was “within her rights” to authorise the withdrawal.
“The minister has the powers to authorise that withdrawal if such a need arises. If you could contact the ministry’s financial controller and chief legal officer, they would be well placed to give you more information on this issue because I am about to enter a meeting in Washington DC,” Mr Mpeta said.
Asked which contract with Bidvest the funds were meant to pay, Mr Mpeta said the ministry had a shortfall in paying for services rendered by the vehicle fleet firm in its six-month contract.
“It’s meant to pay for the first six-month contract that we ended temporarily while considerations were being made on the fleet service tender. There was a shortfall in our payments for that contract,” he said.
Critics maintain that the government short-changed taxpayers by entering into exclusive deals with Bidvest without exploring cheaper options from the plethora of fleet management companies operating in the SADC region by conducting an open, transparent and competitive tender process.
The DC youth league, backed by some of the party’s top officials, insist that the fleet contract with Bidvest must be cancelled. The youth league was adamant that the deal should have been awarded to a local consortium, Lebelonyane, which is said to have quoted far cheaply than Bidvest.
It is not known what exactly the government pays for the fleet services contract with Bidvest. But the contract places onerous responsibilities on the shoulders of the government with explicit powers for Bidvest to withdraw its services if not paid within specific timelines.
The DC youth league has also argued that awarding the tender to Lebelonyane would have ensured that money from the lucrative contract, or at least a substantial part of it, would have remained in the country instead of being repatriated to South Africa.