Energy PS pushes LEGCO transformation amid legal quagmire
Ulterior motives suspected as LEC faces PAC scrutiny
TEBOHO KHATEBE MOLEFI and
MOTSAMAI MOKOTJO
MASERU – A controversial move by Principal Secretary (PS) Tankiso Phapano of the Ministry of Energy to transform the Lesotho Electricity Generation Company (LEGCO) into the Lesotho Electricity Generation Authority (LEGA) is raising serious questions about potential ulterior motives, occurring against a backdrop of damning corruption and mismanagement allegations swirling around its parent company, the Lesotho Electricity Company (LEC), currently under intense scrutiny by the Public Accounts Committee (PAC).
At the heart of the controversy is a stunning revelation, LEGCO, established to spearhead national power generation projects, has allegedly been operating without any legal foundation for its entire six-year existence.
This assertion, corroborated by multiple sources including parliamentary figures, emerges following PS Phapano’s vigorous push for its metamorphosis into LEGA via amendments to the pending Energy Bill of 2024.
Phapano outlined his proposal in a Savingram dated July 21, addressed to Moeketsi Motšoane, Chairman of the Natural Resources Portfolio Committee.
Titled “Establishment of Lesotho Electricity Generation Authority – Conversion of Lesotho Generation Company into a Generation Authority,” the communication argues LEGCO should be transformed into a statutory authority to coordinate all national electricity generation.
Crucially, Phapano cites Section 26 (1) (b) of the proposed Energy Bill amendments, which deals with public electricity generating entities established by an Act of Parliament.
This citation is deeply problematic. The original Energy Bill’s Section 26 (1) envisioned electricity generation undertaken by the public sector, private sector, or cooperatives through a tender process led by a commission.
It made no provision for a specific entity like LEGCO. Chairman Motšoane explicitly confirmed LEGCO’s dubious legal status to this publication: “In the Bill, the Lesotho Electricity Generation Company doesn’t exist, it is not legal. We found that it does not have any parliamentary law supporting it, which raises concerns about its existence.”
This means LEGCO, a wholly-owned subsidiary of the state utility LEC, has been operating for six years, managing government assets and projects, without the statutory mandate required for a public entity performing such functions.
Energy and legal experts warn this creates a profound legal liability.
“LEGCO has been operating for six years on behalf of the government without a legal or statutory basis,” one expert starkly stated.
“This means that during this time, any actions taken by LEGCO may be deemed ultra vires, or beyond its legal authority. This exposes both the government and LEGCO to significant legal risks, including potential invalidation of contracts, procurement processes, employment arrangements, and financial transactions carried out during its operation without proper legislative backing.”
When confronted, PS Phapano reacted defensively and with visible agitation. He insisted LEGCO operates legally, registered under the Companies Act at the Ministry of Trade.
“It was already in the (Energy) Bill, hence I submitted to the (Natural Resources) chairperson to incorporate it . . . please refrain from suggesting that LEGCO is not a legal entity,” he said.
However, when pressed directly on why LEGCO wasn’t established by an Act of Parliament as implied by his own Savingram reference, he abruptly changed the subject, claiming LEGCO was merely initiated for a project in Ha Ramarothile, before terminating the interview: “I am in a meeting. I won’t answer any more of your questions.”
PS Phapano’s push for LEGA occurs as LEC, LEGCO’s parent company, faces intense investigation by the PAC over alleged rampant corruption, financial mismanagement and governance failures. Testimonies and evidence before the PAC have painted a picture of an institution plagued by irregularities, raising legitimate concerns about systemic issues within the energy sector’s state-owned enterprises.
Given LEGCO’s apparent illegal status and LEC’s ongoing scandals, PS Phapano’s urgency in transforming LEGCO into LEGA raises significant red flags and invites scrutiny of potential ulterior motives: Retroactive legitimization or cover-Up? Is the primary goal to hastily paper over six years of potentially illegal operations by LEGCO, shielding past decisions, contracts, and expenditures from legal challenge and public scrutiny, especially as the PAC probes intensify?
The expert warned that simply adding a clause saying “Government may create an authority” is insufficient and vague; explicit naming and legitimization of past acts are needed – precisely what the transformation might aim to achieve.
Reduced Accountability? Statutory authorities often operate under different, sometimes less stringent, governance and procurement frameworks compared to companies registered under the Companies Act or fully state-owned enterprises. Could LEGA be structured to bypass certain transparency and oversight mechanisms that LEGCO (theoretically) should have been subject to? This could create fertile ground for continued mismanagement.
Transforming LEGCO into LEGA, directly under the ministry’s influence via its board appointments, could concentrate significant power over Lesotho’s future energy generation projects – hydro, solar, wind – and associated multi-million-dollar contracts within the PS’s sphere. This raises concerns about conflicts of interest and the potential for steering lucrative deals.
With LEC mired in scandal, rebranding LEGCO as LEGA might be an attempt to create a perceived ‘clean break’ or a new entity insulated from LEC’s tarnished reputation, potentially making it easier to secure funding or partnerships while the parent company remains under fire.
An MP speaking anonymously voiced a critical fear: “I read your report on the LEC… LEGCO operates similarly. It is an illegal entity receiving funding from the consolidated fund. Can we be sued, or can LEGCO employees refuse to appear before us (PAC), given that it was not established by an Act of Parliament?” Creating LEGA via statute could potentially be used to redefine or limit parliamentary oversight of this critical function.
Advocate Relebohile Pitso highlighted the inherent risks of subsidiary structures like LEGCO under LEC: “Effective management of subsidiaries requires robust governance structures to ensure accountability and transparency… Subsidiaries may lead to conflicts of interest, particularly if they compete with the parent company or other subsidiaries in tender processes.”
The lack of a clear legal mandate for LEGCO exacerbates these risks exponentially.
The legal expert emphasized the inadequacy of the proposed amendment: “The clause is vague and lacks the specificity needed to establish LEGCO as a lawful public authority. To mitigate further complications, the Energy Bill must be revised to explicitly name LEGCO, articulate its functions and governance structure, and include transitional provisions to legitimize its past actions.”
Phapano’s current proposal appears to lack this critical detail.
The original vision for LEGCO was undeniably ambitious and necessary: to systematically develop Lesotho’s vast hydro, solar, and wind potential to achieve energy sovereignty, meet domestic demand, and become a net exporter within SADC.
Lesotho remains heavily dependent on expensive imports from South Africa and Mozambique despite its abundant renewable resources.
However, the revelation of its alleged illegal operation and the controversial push for its transformation into LEGA, spearheaded by a ministry official while the parent company faces corruption hearings, cast a long shadow over these national aspirations. It suggests that noble goals may have been derailed by poor governance, potential illegality, and actions that demand rigorous investigation rather than hasty legislative fixes.
Chairman Motšoane confirmed that discussions on Phapano’s proposed amendments are pending before his committee. Given the gravity of the situation – the six-year legal vacuum, the potential for massive liability, the ongoing LEC scandal, and the serious questions surrounding the PS’s motives – the Portfolio Committee and Parliament must exercise extreme diligence.
The transformation of LEGCO into LEGA cannot be allowed to become a legislative sleight-of-hand to erase six years of potentially unlawful operation or to create a less accountable entity under the cloud of LEC’s corruption scandal.
The energy security and financial well-being of Lesotho demand nothing less than full transparency and rigorous accountability. The PAC’s spotlight on LEC must now extend to illuminate the true nature and motives behind the push for LEGA.
