MASERU – The government will vigorously pursue those responsible for the costly Bidvest contract as it ratchets up attempts to recover monies siphoned out of the national till fraudulently, Finance Minister Dr Moeketsi Majoro has said.Majoro last Friday indicated that government was inching towards a long-awaited sweeping investigation into how the ministry of finance in 2017 awarded a controversial long-term fleet supply and management contract to Bidvest at short-term rates.
Those suspected of wrongdoing must face the consequences including prosecutions, he said, amid confirmation from the Directorate on Corruption and Economic Offences (DCEO) was probing the controversial deal. Bidvest was initially engaged by government, albeit for a short-term, to run the government fleet from October 1, 2015 to March 31, 2016 after Avis Fleet Services’ exit.
After expiry of the short-term agreement, government then controversially awarded Bidvest a 48-month contract but on short-term rates. The contract was later cancelled in 2017. The costly deal, which was hatched by the previous government led by former Prime Minister Pakalitha Mosisili, is one of the causes of government’s current financial woes, according to Finance Minister Dr Moeketsi Majoro.
Majoro last week indicated that though the raw deal was cancelled more than 12 months ago, the issue was neither negligible nor water under the bridge. “We are not going to let it just go. The payments that were made to Bidvest were irregular,” he said. “We first need to understand what actually happened. If there were mistakes, then someone must be held accountable for those mistakes,” he added.
Earlier last month Majoro gave a sober assessment of the government’s financial position. He said the difficult macroeconomic conditions the government is faced with were exacerbated by the extraordinarily large fiscal deficit brought about by government fleet costs. To ease the foreign currency situation, he said government has held preliminary discussions with the International Monetary Fund (IMF) and hopes to reach an agreement by the end of August.
“We believe such huge payments made to Bidvest were irregular and unnecessary, we cannot let this go. We will be setting a very bad precedent if we do not do anything about it. People would just unashamedly misuse public funds knowing that nothing will happen to them,” he said last Friday.
“An investigation must be conducted to unearth how government got into such a costly contract and who is responsible,” he added. He further indicated that the case has been referred to law enforcement agencies for investigation and that the ministry of finance will coordinate and cooperate with the law enforcement institutions and provide them with pertinent information whenever it is needed.
At the moment, he said, it would be imprudent to instantly conclude that former officials violated laws when they handed the lucrative contract to Bidvest on a silver platter. The Directorate on Corruption and Economic Offences (DCEO) spokesperson ‘Matlhokomelo Senoko told Public Eye this week that the corruption-watchdog had already launched a comprehensive investigation into the matter without giving further details.
Ever since the current government was elected to power in June 2017, there has been political noise from some even in the top echelons of the four governing parties that an investigation into the Bidvest contract should be launched post-haste. According to some commentators, the deal was tantamount to a scam to siphon state funds.
A few weeks ago, fleet management expert Michael ‘Mabathoana told Public Eye that instead of seeking an IMF bailout, government should first chase after Bidvest Bank to ensure it pays back alleged ill-gotten funds from Lesotho. ‘Mabathoana said the restitution could come in handy as Majoro seeks to stabilise both the fiscal and foreign currency reserves positions of the cash-strapped government.
He indicated that turning to IMF for a bailout did not make economic sense for a country which is already drowning in debt. According to the report of the Auditor General Lucy Liphafa for the year ended March 31, 2017, “the government’s closing external debt stock at March 31, 2016 stood at M12.703 billion.”
For the year under review, “debt financing amounted to M646 million, which consisted of loan repayments of M435 million and interest payments of M211 million,” Liphafa noted in her report. External debt is usually of particular concern because it is typically denominated in a foreign currency which makes it vulnerable to exchange rate fluctuations.
Last year the DCEO slapped former minister of finance Dr ‘Mamphono Khaketla with a corruption charge for allegedly soliciting a M4 million bribe from directors of a local fleet service company Lebelonyane on March 2016 in exchange for a government fleet tender. The tender was eventually awarded to Bidvest, apparently because Lebelonyane, which was recommended by the government’s bid evaluation team as the winning bidder, had refused to bribe Khaketla.
Despite the bid evaluation team’s recommendation, Lebelonyane did not win the tender. Instead, the then administration of the former Prime Minister Mosisili extended Bidvest’s contract by four years. In the charge sheet, the DCEO said Khaketla was to use her powers and position as minister of finance to ensure that the tender was awarded to Lebelonyane.Default Basic Success warning Info Danger Primary