BID­VEST DEAL BOMB­SHELL

. . . Moleleki says gov­ern­ment paid M600m in last fi­nan­cial year to SA firm and re­cently fol­lowed up with another M73 mil­lion in penal­ties

Lesotho Times - - Front Page - Lekhetho Nt­sukun­yane

BUTHA-BUTHE — The gov­ern­ment paid M600 mil­lion in the last fi­nan­cial year to Bid­vest Bank Lim­ited and re­cently fol­lowed this up with another M73 mil­lion in penal­ties after pre­ma­turely ter­mi­nat­ing the con­tro­ver­sial ve­hi­cle fleet ser­vice con­tract it signed with the South African com­pany last year, ac­cord­ing to Al­liance of Democrats (AD) leader Monyane Moleleki

Mr Moleleki, who was un­til re­cently part of Prime Min­is­ter Pakalitha Mo­sisili’s seven party coali­tion, says the gov­ern­ment also agreed to pur­chase 159 used­cars from Bid­vest for M37 mil­lion as part of the ter­mi­na­tion agree­ment, with another 124 set to be ac­quired for M28 mil­lion after the pre­ma­ture end of the con­tract.

Last month, Fi­nance Min­is­ter Tlo­hang Sekhamane an­nounced the can­cel­la­tion of the con­tro­ver­sial ve­hi­cle fleet ser­vices con­tract with ef­fect from 1 April 2017.

Mr Sekhamane had ad­mit­ted that the South African fi­nan­cial in­sti­tu­tion had milked gov­ern­ment of mil­lions of mal­oti and said the bills were spi­ral­ing to a point where it was dif­fi­cult to pay them off.

The gov­ern­ment ini­tially awarded Bid­vest 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.

The gov­ern­ment had promised to ex­clude Bid­vest from any new ten­der to find a new fleet man­age­ment firm to re­place Avis.

How­ever, the gov­ern­ment can­celled the ten­der process, pre­fer­ring in­stead to en­ter a new long-term con­tract with Bid­vest, which had not bid for the ten­der as ear­lier agreed in light of its en­joy­ment of the six month con­tract.

Then Fi­nance min­is­ter Dr ’Mam­phono Khaketla had said while an­nounc­ing the deal in June last year that the gov­ern­ment would buy 600 ve­hi­cles and hire another 600 from or­di­nary Ba­sotho, with Bid­vest only man­ag­ing the fleet.

She also said the gov­ern­ment had de­cided to can­cel the ten­der process be­cause it did not have enough money to con­tinue with the op­tion of hir­ing ve­hi­cles.

How­ever, a joint ven­ture com­pany, Le­be­lonyane, short­listed for the ten­der took the gov­ern­ment to court seek­ing an or­der to stop the gov­ern­ment from en­gag­ing Bid­vest.

The 48-month con­tract en­tered into by the gov­ern­ment stip­u­lated that Bid­vest Bank Lim­ited would pro­vide “pos­ses­sion, use and en­joy­ment of the ve­hi­cles for the con­tract pe­riod” with the gov­ern­ment only hav­ing the op­tion to buy the fleet at the end of its con­tract.

The ar­range­ment con­tra­dicted claims by sev­eral min­is­ters that the gov­ern­ment was buy­ing 600 of the ve­hi­cles for its di­rect full own­er­ship from the on­set with the re­main­der be­ing leased from Ba­sotho.

How­ever, the Bid­vest con­tract clearly stip­u­lated that the gov­ern­ment would not “ac­quire any own­er­ship rights of any na­ture what­so­ever” of the ve­hi­cles de­spite be­ing reg­is­tered as “owner”.

The con­tro­ver­sial fleet con­tract was one of the root causes of the split in the Prime Min­is­ter Pakalitha Mo­sisili-led Demo­cratic Congress (DC) in Novem­ber 2016.

A fac­tion loyal to then DC deputy leader Monyane Moleleki ac­cused loy­al­ists of Dr Mo­sisili in the party of cor­ruptly in­flu­enc­ing the award­ing of the deal in Bid­vest’s favour.

Their ire was mainly di­rected at Dr Khaketla, whom they ac­cused of dis­re­gard­ing due process in award­ing the ten­der to Bid­vest at the ex­pense of joint ven­ture com­pany — Le­be­lonyane — that had been rec­om­mended for the con­tract.

Dr Khaketla, who was later reshuf­fled to the For­eign Af­fairs port­fo­lio, has ve­he­mently de­nied al­le­ga­tions of cor­rup­tion and even sued some of her ac­cusers for M6 mil­lion, after they ac­cused her of earn­ing a M4 mil­lion bribe in the Bid­vest morass.

Mr Moleleki and his fac­tion even­tu­ally left the DC to found the Al­liance of Democrats in De­cem­ber 2016 after fail­ing to oust Dr Mo­sisili from the helm of the party.

In an­nounc­ing the can­cel­la­tion of the Bid­vest deal, Mr Sekhamane did not state the amounts owed and al­ready paid to Bid­vest.

He in­di­cated that the gov­ern­ment would adopt a new pol­icy of hir­ing Ba­sotho-owned ve­hi­cles with the con­tracts not ex­ceed­ing 12 months.

The min­is­ter also said the ve­hi­cles must have mileage of not more than 30 000 kilo­me­tres, un­der a mo­tor ser­vice plan and in­sured un­der a com­pre­hen­sive in­sur­ance for the du­ra­tion of the 12-month con­tract.

How­ever, ad­dress­ing thou­sands of party sup­port­ers at a rally in HaMarak­abei vil­lage in the ButhaButhe dis­trict on Sun­day, Mr Moleleki said the Bid­vest deal was the costli­est since in­de­pen­dence in 1966 be­cause the gov­ern­ment had not spent as much money for trans­port ser­vices in one fi­nan­cial year be­fore.

The rally was meant to drum up sup­port for the party ahead of the 3 June 2017 elec­tions in the four elec­toral con­stituen­cies of Mechachane No.1, Hololo No.2, Motete No.3 and Butha-buthe No.4.

“Since our in­de­pen­dence in 1966, the gov­ern­ment has not spent M200 mil­lion for trans­port in one fi­nan­cial year,” Mr Moleleki said.

“With the Bid­vest con­tract, the gov­ern­ment has ex­ceeded M600 mil­lion in trans­port alone in one fi­nan­cial year be­cause of cor­rup­tion.”

“Ntate Mo­sisili’s gov­ern­ment has fi­nally can­celled its con­tract with Bid­vest long after we warned them.

“Ntate Sekhamane has fi­nally ad­mit­ted that Bid­vest was milk­ing money from Le­sotho,” Mr Moleleki said.

Mr Moleleki said Bid­vest had pe­nalised the gov­ern­ment for pre­ma­turely ter­mi­nat­ing the con­tract, adding:

“The gov­ern­ment of Le­sotho has al­ready paid M73 mil­lion for can­cel­la­tion of the con­tract.

“And on top of that, the gov­ern­ment is bound to buy 159 used ve­hi­cles from Bid­vest at the cost of M37 mil­lion. Don’t be sur­prised to hear that another 124 ve­hi­cles have been bought from the same com­pany at the cost M28 mil­lion.”

The AD leader said most of the ve­hi­cles bought by the gov­ern­ment from Bid­vest were “too old” to be placed on war­ranty or guar­an­tee.

The Le­sotho Times re­peat­edly sought in vain to ob­tain com­ments from Mr Sekhamane and Bid­vest this week.

Mean­while, econ­o­mist Kanono Tha­bane yes­ter­day told the Le­sotho Times that if true, the M73 mil­lion pay­ment by the gov­ern­ment to Bid­vest af­fected the cred­i­bil­ity of the na­tional bud­get.

“The cred­i­bil­ity of the na­tional bud­get for Le­sotho has been un­der a lot scru­tiny lately,” said Mr Tha­bane who is also the pro­gramme direc­tor at the Le­sotho Coun­cil Non-govern­men­tal Or­gan­i­sa­tions (LCN).

“A cred­i­ble bud­get is the first re­quire­ment of ef­fec­tive pub­lic fi­nan­cial man­age­ment. The Pub­lic Ex­pen­di­ture and Fi­nan­cial Ac­count­abil­ity (PEFA) Re­port for Le­sotho over the past decade has shown that the ma­jor chal­lenge to Le­sotho’s fis­cal pol­icy is the weak cred­i­bil­ity of the bud­get,” Mr Tha­bane said.

“In sim­ple lan­guage it means that, through­out the fis­cal year, the gov­ern­ment should not im­ple­ment what it did not plan for dur­ing the bud­get speech.

“We should im­ple­ment ev­ery­thing that was ap­proved in the bud­get speech and noth­ing else.

“If we im­ple­ment it at a higher cost or have other new and un­planned for ac­tiv­i­ties, then the cred­i­bil­ity of the bud­get will fall.”

He added that if the gov­ern­ment paid that much to ter­mi­nate the con­tract, “that shows se­ri­ous de­vi­a­tion from planned ag­gre­gate ex­pen­di­ture and de­te­ri­o­ra­tion of gov­ern­ment cred­i­bil­ity”.

“Thus there is a need for stronger puni­tive lead­er­ship from the Min­istry of Fi­nance in the ar­eas of pub­lic fi­nance man­age­ment in Le­sotho.

“Again, this does not with­stand the op­por­tu­nity cost of the funds be­ing paid to the com­pany.”

Mr Tha­bane said over the years, Le­sotho had wit­nessed in­creas­ing fis­cal de­mands in the form of stu­dent fees, post-drought liveli­hood restora­tion, and ba­sic in­fra­struc­ture to fa­cil­i­tate eco­nomic ac­tiv­ity and job creation.

“Thus the Min­istry of Fi­nance needs to demon­strate com­posed lead­er­ship in the trans­la­tion of po­lit­i­cal as­pi­ra­tions and de­vel­op­ments needs into poli­cies, ac­tions and bud­getary poli­cies; pro­vi­sion of ro­bust sys­tems of bud­get clas­si­fi­ca­tion; min­imis­ing de­vi­a­tion be­tween ap­pro­pri­a­tion and ex­pen­di­tures; and con­ver­sion of ex­pen­di­ture into pub­lic goods,” he said.

Mr Tha­bane said the is­sue of cap­i­tal flight was one of the chal­lenges af­fect­ing pri­vate sec­tor de­vel­op­ment in Le­sotho.

“There is there­fore a need for stronger lead­er­ship in the Min­istry of Fi­nance to drive the ex­pen­di­ture ra­tio­nal­i­sa­tion pro­gramme with the aim of achiev­ing fis­cal pru­dence,” he said.

Former De­vel­op­ment Plan­ning Min­is­ter and econ­o­mist, Moeketsi Ma­joro said the M73 mil­lion Mr Moleleki has al­leged is not a very large sum con­sid­er­ing that the four-year con­tract with Bid­vest Bank would have cost Le­sotho bil­lions of mal­oti.

“But when con­trasted with the fact that many of our peo­ple go to sleep daily with­out eat­ing, and wake up the next morn­ing with­out know­ing where their next meal is com­ing from, it is sud­denly a very large waste of tax­payer re­sources,” he said.

“It is also a very large waste­ful ex­pen­di­ture given that Le­sotho can­not pro­vide all the AIDS drugs it needs or pay for the full costs of stu­dents at the Na­tional Univer­sity of Le­sotho.

“Why would the gov­ern­ment, in its pri­ori­ti­sa­tion of pub­lic sec­tor needs, not have the moral ap­ti­tude to re­alise that ex­pen­sive cars for min­is­ters and civil ser­vants can never be more im­por­tant than these few ex­am­ples.”

Dr Ma­joro, who is the All Ba­sotho Con­ven­tion (ABC) can­di­date for Thet­sane con­stituency for the com­ing snap elec­tions, said he had pre­vi­ously in­di­cated in his pub­lic re­marks that there were “wor­ri­some in­di­ca­tors” that the con­tract with Bid­vest Bank, “which is not au­tho­rised in South Africa to en­ter into non-bank­ing busi­ness”, is cor­rupt.

“I have strong sus­pi­cions that the peo­ple in­volved in mak­ing this de­ci­sion were en­ticed with per­sonal gain to act in the in­ter­ests of Bid­vest and against na­tional in­ter­est.

“They could have put Avis into or­der, as gov­ern­ment pre­vi­ously did with Im­pe­rial Fleet Ser­vices, but they ap­pear to have been so ea­ger to en­ter into an agree­ment with Bid­vest that has turned to be a raw deal for Le­sotho and Ba­sotho,” he said.

Ntate Mo­sisili’s gov­ern­ment has fi­nally can­celled its con­tract with Bid­vest long after we warned them. Ntate Sekhamane has fi­nally ad­mit­ted that Bid­vest was milk­ing money from Le­sotho

AD leader Monyane Moleleki

FI­NANCE Min­is­ter Tlo­hang Sekhamane.

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