Bidvest deal cost govt millions

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 Pascalinah Kabi

THE Pakalitha Mosisili-headed former seven parties’ government paid M261 million to Bidvest Bank Limited of South Africa for the controversial vehicle fleet service contract from October 2015 to March 2016, the Auditor General has revealed.

The figure could have been higher as the Auditor-General’s report only captured the payments up to 31 March, 2016- the period which the audit covered.

The then 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 2016 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 decided to cancel the tender process because it did not have enough money to continue with the route of hiring vehicles.

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

The 48-month contract entered into by the then 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 service deal between the government and Bidvest was only terminated in April 2017, thirteen months after the Auditor General urged the government to review its decision on the fleet management services due to exorbitant costs.

The former government awarded Bidvest Bank Limited a six-month contract to run the government fleet from 1 October 2015 to March 2016 after the expiry of the government’s fleet management contract with Avis.

However, a report into the 2016 consolidated financial statements released this week by the office of the Auditor General indicated that government’s decision to award the fleet service management to Bidvest cost the state a fortune.

The report stated that there was a significant increase of 60 percent in costs compared to when the government had a fleet management contract with Avis Fleet Services in 2014/15 and Bidvest Fleet Services in 2015/16.

“During the financial year 2014/15, the government spent a total amount of M164 031 069 and while for the financial year 2015/16, it incurred a total of M261 833 030 resulting in an increase of M97 801 961,” Auditor General, Lucy Liphafa, said in the report.

“Furthermore, this increase calls for government to review its decision on fleet management services.”

Former Police Minister in the previous government and current Deputy Prime Minister, Monyane Moleleki, dropped a bombshell when he announced  that the former government paid M600 million in the last 2016/17 financial year to Bidvest Bank Limited.

Speaking at the rally in Butha-Buthe in April ahead of the June elections, Mr Moleleki said the government further followed this up with another M73 million payment in penalties after prematurely terminating the controversial vehicle fleet service contract it signed with the South African company.

Mr Moleleki said the government also agreed to purchase 159 used-cars 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.

The controversial fleet contract was one of the root causes of the split in the Dr Mosisili-led Democratic Congress (DC) in November 2016 and subsequent collapse of government in March 2017.

Mr Moleleki who was deputy leader, left the DC to form the Alliance of Democrats. He cited corruption, including in the Bidvest deal for his decision to ditch the DC.

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