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Chinese firms in tussle for Lesotho’s lucrative Mpilo upgrade tender

Itumeleng Koleile

A Chinese joint venture has taken its controversial battle to win a contract for the upgrading of M380 million Mpilo Boulevard to appeal court after its victory was nullified by high court in 2020.

The tender was a sensational issue in 2019, as it was alleged former first lady Maesaiah Thabane, ministers and senior government officials tried to influence award and give it to Unik Construction Engineering.

The appeal by SCIG-SMCS-TIM Joint Venture will be heard on Thursday this week.

Led by its managing director, Zengkai Wang, the joint venture is challenging Chief Justice Sakoane Sakoane’s decision that nullified award of the lucrative tender for upgrading of the Maseru City’s Mpilo Boulevard intersections and links.

Sakoane’s judgement was prompted by a challenge brought by Unik Construction Engineering contesting award of the tender to the JV after its bid was disqualified on technical grounds that it had failed to submit its bid accompanied by a power of attorney.

The JV and the Maseru City Council as second appellant argue Justice Sakoane “erred and misdirected himself” in holding that the council’s decision to disqualify Unik Construction for failure to sign a power of attorney was a reviewable error of law.

The JV also claims the Chief Justice erred in holding that the omission by Unik’s managing director Reynier Scholten was not fatal to its tender bid, and that the council’s failure to give reasons for disqualifying the respondent’s tender was a reviewable procedural irregularity.

In November 2020 Sakoane set aside the council’s decision to disqualify Unik’s bid and ordered it to reconsider the tender.

Sakoane said the immediate disqualification of Unik should have been communicated in the manner stipulated by Regulation 28 (4) of public procurement regulations, which stipulates that Unik ought to have been informed within ten working days of being rejected.

Sakoane found according to the request for proposals, the preferred tenderer was only required to sign a power of attorney before the contract was concluded.

“The omission to sign a power of attorney is, I consider, not so fatal an omission as to disqualify Unik. The bid was rejected [because of] the formal omission of the signature and not the failure to provide a mandatory document,” he said.

Sakoane also said a disqualification based on “immaterial and innocent mistakes” undermines the policy objectives of cost-effectiveness and competitiveness in public procurement.

Unik also argued against the selection of Wang’s JV on grounds that its tender document was not in compliance with the section 24 (1) of the public procurement regulations.

This provides that “the tender documents and invitation to tender shall be prepared in either of the official languages —Sesotho or English — and in cases where Sesotho does not have technical terms to convey the requirement accurately, then English can be used in place of a Sesotho text”.

Scholten argued Wang’s documents were not translated from Chinese into either Sesotho or English.

“This was sufficient grounds to disqualify Wang’s Joint Venture before reaching the evaluation stage of the tendering process. It was irregular to allow the joint venture’s bid to proceed to the evaluation stage,” argued Scholten.

The Politics

In July 2019 the former minister of local government, Litšoane Litšoane, dissolved the tender panel arguing the council had no right to be part of tender panel in line with local government Act of 1997.

His ruling was subsequently reviewed and set aside by High Court judge Molefi Makara.

The court ruled that Litšoane exceeded his legal powers and should have given the panel the right to defend itself. It also found that the onus to dissolve and appoint a tender panel rests with the Principal Secretary.

The former Principal Secretary of local government, Khothatso Tšooana, then set up a new panel of his own choosing to continue with award of the tender.

When Tšooana appeared before Parliament’s public accounts committee in 2019 at the height of battle for the tender, he accused both former minister of small business and cooperatives Chalane Phori and the former agriculture minister Mahala Molapo of ordering to award the tender to their preferred bidder.

Tšooana also told the committee both ministers were acting in concert with the former first lady, Maesaiah Thabane.

Phori’s company, Tsoapo’s Brick Works, was Unik’s partner in its bid for the tender.

Tšooana accused Phori of arguing that Unik should be awarded the tender as its former managing director, Yan John Xie, had provided financial support for the leader of All Basotho Convention, former prime minister Thomas Thabane while he was in exile in the South Africa from 2015 to 2017.

Xie is a controversial Chinese businessman who was appointed a trade and investment adviser to Thabane while he was premier between July 2017 and May 2020.

Court of appeal

In the papers filed before the Court of Appeal, the joint venture claims Chief Justice could not nullify the tender because the issue of the Maseru council giving reasons for Unik’s immediate disqualification was not raised as grounds for review in the review application.

The JV also states that Unik did not raise the decision to immediately disqualify it as grounds for review. It says the court was not entitled to make findings on facts that are not contained in the affidavits.

“The court is not entitled to make findings of facts which are not contained in the affidavits and to grand relief that has not been sought and justified by Unik,” reads the papers.

Wang’s JV also argues that the failure to inform Unik of the rejection of its tender should not impair its legal validity.

 It argues that “the power of attorney was one of the mandatory requirements that had to be met for Unik’s tender to qualify for evaluation”. It said the Maseru council was acting in terms of Regulation 28 (3) by rejecting the tender once the power of attorney was not signed, as the invitation to tender specifically required this.


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