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Govt sued over controversial airport tender

Mohalenyane Phakela

THE government’s controversial decision to award a M33 million tender for the upgrading of Moshoeshoe I International Airport to a liquidated South African company has come back to bite it.

This after a conglomerate of local construction and mining companies filed an urgent application to overturn the tender award to South Africa’s LTE Consulting.

Calling itself the Civil Mining and Building Constructors, the conglomerate was joined in its application by a local consultancy, PM Aviation Consultancy. PM Aviation was one of the four companies which lost the airport tender to LTE Consulting in June 2021.

Transport Minister Tšoeu Mokeretla, LTE Consulting and Attorney General Rapelang Motsieloa are the first to third respondents respectively in the application.

LTE Consulting is owned by controversial South African businessman, Thulani Majola, who is said to enjoy cordial relations with politicians in both the Lesotho and South African governments.

In June 2021 the transport ministry awarded controversial South African businessman Thulani Majola’s LTE Consulting a M38 million contract to oversee the refurbishment of Lesotho’s dilapidated airport as the Mountain Kingdom races against time to meet International Civil Aviation Organisation (ICAO)’s standards, following the latter’s threats to shut it down.

But already on 18 March 2021, a provisional liquidation application had been launched by a creditor of LTE Consulting in the Johannesburg High Court. The application was granted on 9 June 2021, a day before unsuccessful bidders were informed the contract had been awarded to LTE Consulting.

South Africa’s famed AmaBhungane Centre for Investigative Journalism published a story about Mr Majola’s alleged use of his political connections in Lesotho to land the multi-million maloti tender.

The article also stated that the airport tender was awarded to LTE four months after its liquidation.

The liquidation, the article stated, was as a result of LTE being accused of failing to honour a M23 million debt to its South African sub-contractor, Kontinental Engineering Consulting, for a bus station construction project for the City of Ekurhuleni in 2020.

LTE had initially entered into talks regarding a settlement with Kontinental after the latter had filed a liquidation application in the Johannesburg High Court.

However, the parties failed to reach an agreement and Kontinental went back to court, arguing that LTE had paid M14 million but still owed M8, 9 million. This led to the eventual liquidation of LTE, according to AmaBhungane. A final liquidation order was then issued on 24 February 2022.

This has prompted the conglomerate and PM Aviation to launch their application challenging the tender award to LTE Consulting.

In their court papers filed yesterday, the applicants accuse Mr Mokeretla of having a personal interest in LTE which they must be investigated.

“The association learnt with dismay that the first respondent (Mokeretla) had awarded a contract to a liquidated foreign company through newspapers,” the association’s secretary general, Mohalenyane Masasa, states in his founding affidavit.

“We then conducted private investigations around this scandal and we established that the first respondent is having a special interest in the transactions of the second respondent (LTE) and yet deliberately refrains from the disclosure of that interest in order to deceive and induce the state to act to its prejudice…

“It suffices to indicate that the liquidation proceedings against second respondent were widely circulated in the print media and radio stations locally and in South Africa. It cannot be said that first respondent and his officials were not aware that the second respondent was not eligible to tender for the consultancy work. On the other hand, the directors of the second respondent had a duty to disclose to the officials of the first respondent that they were faced with liquidation proceedings and to recount in detail the facts that have given rise to the liquidation proceedings. It is a matter of procedure…

“The defence staged for the decision to allocate state resources to a liquidated foreign company might well have been a question of considerable difficulty to justify. It therefore appears to me that that the Ministry knew that the second respondent was under liquidation and that the awareness and appreciation of the existence of the duty to disqualify it from tendering was sacrificed on the altar of their convenience. To put it in another way, the non-disclosure of the status of the second respondent at the bidding stage resulted in a misrepresentation which was perpetrated with a fraudulent intent,” Mr Masasa states.

He further alleges that after having dishonestly awarded the tender to LTE Consulting, huge amounts of money were paid to the South African company even before it had started work. He accused LTE of presenting fake invoices of expenses it claimed to have incurred in order to justify the payments.

“In as far as this tender is concerned, the Ministry of Transport is not prepared to mitigate risks of corruption in a timely and systematic manner. For example, they continue to pay LTE Consulting in a coordinated schedule when there are no project-specific plans prepared to establish project milestones and an effective structuring of payment. The money is just being paid without performance reporting that aligns procurement activities with expected outputs or outcomes, particularly when it is linked to associated expenditure on the foreign company that failed to pay its debts in its own country.

“As the situation stands, there is a suggestion that LTE Consulting is taking the money from Lesotho to pay its debts in the Republic of South Africa taking into account the fact that it undertook to pay its debts immediately after it secured a direct deal with senior government officials of the government of Lesotho. This warrants that payments to LTE Consulting be interdicted to enable wider public to monitor the way public funds are spent,” Mr Masasa said.

The issue of airport rehabilitation comes against the background of threats by the ICAO to close the country’s only international airport if it is not refurbished.

ICAO first issued the threats to close down the airport in December 2020. It said several years of neglect had left the airport facilities in a state of disrepair.

The Director of Civil Aviation Department, Motsoale Lesupi, is on record saying that the government is in a race against time to refurbish the “collapsing” airport, failing which it would be closed or downgraded to a domestic airport catering only for local flights.

Mr Lesupi said the Airports Company of South Africa (ACSA) had now been awarded a tender to refurbish the airport at an estimated cost of M500 million.

Should the work not be finished on time for an inspection on a date to be determined by the ICAO, the airport could be forcibly closed by the international body tasked with regulating all international aviation activities, he said.

Its closure will create a massive crisis as new travel arrangements would have to be made for His Majesty King Letsie III, Prime Minister Moeketsi Majoro, ministers, government officials, diplomats, captains of industry and other ordinary travellers who rely on the airport for international travel.

State officials could alternatively resort to using military planes, which in itself would be a logistical nightmare, because special permits to fly such planes into South Africa would have to be obtained to avoid conflict with that country’s defence force.

More likely, they will be forced to travel long distances by road to international airports in South Africa.

The tourism sector, which is battling to recover the Covid-19 induced slowdown in business activities, would be thrown into further turmoil by the closure of the airport.