VILLAGERS around Mohale Dam, about 70km north-east of Maseru, are an unhappy lot. When the dam was built about 26 years ago, they were told that it would significantly improve their lives and would help them escape the wretched poverty. But two decades later, nothing of that sort has happened.
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TIM Plant Hire is owed M40 million by the Qingjian Group for its construction work on the 91km Mpiti-Sehlabathebe Road.
It is also owed M17 million by Shanxi Construction Investment Group (SCIG) and Shanxi Mechanization Construction Group (SMCG) for work on the Mpilo Boulevard project.
The Maseru City Council (MCC) has since cancelled the M379 million Mpilo Boulevard project after discovering that SCIG and SMCG, the lead partners in the joint venture with TIM, forged an advance payment guarantee to claim the M14 million initial payment to start work.
LSP has appealed to Energy Minister Professor Nqosa Mahao while TIM is pleading with the Minister of Public Works, Matjato Moteane, and Local Government Minister Lebona Lephema.
Moteane is responsible for the Mpiti-Sehlabathebe Road while Lephema is in charge of the Mpilo Boulevard.
Tuwana, SCIG and SMCG claim they could not pay the companies because they did not meet their obligations as partners and sub-contractors. They point to project delays and non-compliance with contractual terms to justify their refusal to pay the full amounts.
But LSP and TIM accuse the Chinese companies of using nasty business tactics and making false allegations to avoid paying for work completed, approved and accepted by the clients.
In a letter to Professor Mahao, LSP says Tuwana has been refusing to settle the debt despite that work has been completed and the solar power station commissioned.
The M37 million debt includes M8.9 million for work done and M28 million for claims against Tuwana’s late delivery of materials for the substation and the tower.
LSP says it completed the project despite Tuwana’s failure to provide proof of financing and failure to deliver materials on time.
The company says the minister should intervene because Tuwana is now shifting goalposts, deliberately misinterpreting the contract, avoiding due process and making false allegations to avoid paying up.
LSP tells Professor Mahao, in a March 20 letter, that Tuwana fired an arbitrator who had ruled in the LSP’s favour. It accuses Tuwana of making false allegations of non-compliance to avoid paying.
For instance, Tuwana alleged that LSP did not conduct tests and commissioning during the “most critical trial operation stage” of the Ramarothole Solar Farm project.
The LSP however says this is a false allegation contrived to avoid paying.
The truth, LSP says in the letter to the minister, is that the representatives of Tuwana and its other subcontractor, Sinoma Energy Conservation, were present during the tests and commissioning.
So were representatives of the Lesotho Electricity Company (LEC), the buyer of the power from the solar farm.
The LSP says the project has been handed to the government and is “working and functioning” but Tuwana and Simona failed to issue Take Over Certificates.
“It is therefore a contradiction in material terms for Tuwana to take over the works and then claim tests and commissions were not conducted, yet it took over the work and handed the same over to the government,” LSP says in the letter.
LSP says instead of paying Tuwana is now accusing them of failing to perform some duties that were never part of their obligations in the contract.
For example, Tuwana claims LSP refused the Ministry of Energy’s instruction to restore the site to its original state. LSP however says this is false because the ministry’s proposal related mainly to stormwater management which were “design matters” that were never part of its contract with Tuwana.
LSP is requesting Professor Mahao to instruct Tuwana to pay the debt and “refrain from making baseless allegations” against it. It claims to have been left on the “brink of bankruptcy due to non-payment”.
TIM’s M109 million contract with Qingjian to work on 20km of the 90km Mpiti-Sehlabathebe Road was signed in May 2019.
In their March 19 letter to the Minister of Public Works, TIM alleges that Qingjian consistently delayed payments throughout the contract and starved it of cashflows it needed to continue working.
It says Qingjian has refused to pay the M40 million debt despite that work has been completed as per the contract.
TIM says because Qingjian failed to make payments on time several contractors abandoned work until the Ministry of Public Works intervened.
It says after starving it of payments and “stifling” its cash flow, Qingjian proposed to supply construction material and then deducted the cost from future payments.
Those deductions, TIM says, were made at cost prices as agreed but Qingjian didn’t pay its debt in full. Instead of paying up, Qingjian claimed to have assisted TIM with material and financial support. Qingjian also alleged that TIM started work in secret and was overpaid millions.
TIM denies these allegations, pointing out that it repaid Qingjian for the materials and provided evidence that it is owed M40 million. It also dismissed the claim that it started work in secret.
On the Mpilo Boulevard project, TIM says SCIG and SMCG are refusing to pay the outstanding M17 million despite intervention from the MCC and the Minister of Local Government.
SCIG and SMCG claim they stopped paying TIM because it supported a claim by a consultant who helped the joint venture write the tender of the project.
TIM however says it is SCIG and SMCG that discarded the consultant after winning the tender. The company says it supported the consultant and paid part of his bill for writing the tender. TIM has also dismissed allegations that it demanded payments without confirmation of engineering quantity and also received help from SCIG and SMCG.
It says SCIG and SMCG made its work “close to impossible” and there is evidence that interventions by the MCC and the minister did not help because the companies were hostile.
TIM wants the Minister to intervene so that it “does not suffer further financial prejudice due to non-payment”.
Staff Reporter
