11 Dec 2017

Parliament has been told that the National Petroleum Fund was initially managed through the then ANZ Grindleys Bank and later Stanlib Management Services with the fund account held at Stanbic bank.

That was said by Minister of Mineral Resources, Green Technology and Energy Security Advocate Sadique Kebonang when answering a question in Parliament recently.

Advocate Kebonang said in 2015, the ministry through the Department of Energy floated an open tender to procure a consultant who would have to provide fund investment and management services for the National Petroleum Fund and other funds within the ministry and the department.

He said the tender was floated on September 14, 2015 and closed on October 13, 2015 explaining that 13 potential bidders purchased and collected tender documents.

“However, only three bidders of the 13, submitted tender bids which were opened on the same date of closing. Evaluation and adjudication of the received technical tender bids was made between October 22 2015 and November  10 2015,” he said, stating further that financial opening of the financial tender bids was done on  November 17 2015 and the overall evaluation concluded on November 19, 2015.

Advocate Kebonang said the tender was eventually awarded to Basis Point Capital (Pty) Ltd on December 1 2015 at a fee of P15.6 million.

He said Basis Point Capital (Pty) Ltd had sub-contracted Afena Capital (Pty) Ltd now Kgori Capital (Pty) Ltd to provide Fund Investment and Management Services while the former undertook the consultancy work, which entailed among others, review of the energy sector projects and programmes.

He noted that the fee charged for the tender did not cover the fund investment and management services such as custody fees.

He said P15 million was for the main consultancy work, which was to be done within a period of two years while fund investment and management services was to be provided over a period of three years.

That he said, meant that contract for consultancy services would adjourn in December 2017 while that for fund investment and management services would mature in December 2018 subject to extension once negotiated and agreed by the parties.

The minister said between March and June 2016, the ministry through the Department of Energy encountered some project financing challenges with the on-going Tshele Hills project, adding a decision was then taken to find alternative means of funding the project other than from the National Petroleum Fund, which was also overwhelmed with other funding obligations as per its funding order.

He said a request to directly engage Basis Point Capital (Pty) Ltd, which was already on the ground doing the consultancy for review of the energy sector project and programmes amongst other things, was made to the Ministerial Tender Committee (MTC), adding that a full motivation for direct engagement was submitted to MTC for consideration where after the procurement for putting a variation order process begun.

Furthermore, he pointed out that the variation order request was concluded on 5 July 2016 where Basis Point Capital was further engaged to undertake a preliminary assessment of the potential to obtain external funding for the project at a fee of P2.1 million approved by the ministry’s MTC.

He said the company undertook the work, which concluded with recommendations for exploration of alternative means of funding including the selected option for Secure Note Financing Structure, amongst others.

He said the work also revealed that more detailed work required to be done in order to come up with a firm and secure financing option.

Advocate Kebonang said approvals were obtained from cabinet to progress with work, adding that since Basis Point Capital had already performed some substantial work, a request for consideration to directly engage the company was also made to the ministry’s MTC, and that that was eventually approved.

He added that Basis Point Capital resumed the work and was currently in the process of concluding this work which required to be executed with urgency as the Tshele Hills project was already being implemented hence the need to avoid some contractual challenges.

He said a draft cabinet memorandum was recently submitted for consideration and comments received from the Ministry of Finance and Economic Development in the quest to progress and conclude the much needed financing of the project to successful completion.

He added that the files containing the contract information and fees of the second project given to Basis Point Capital were currently held with the Directorate of Corruption and Economic Crime.

Advocate Kebonang said the contract for Stanlib Management Services has been the longest contract ever run for management of the National Petroleum Fund although there were some attempts to refresh this through several open tenders which could not bring any change until the last one where Basis Point Capital/Kgori Capital took over the provision of service.

In conclusion, he said Afena Capital (Pty) Ltd was the current National Petroleum Fund manager and the account was held with the RMB Corporate Bank (First National Bank) of Botswana.

He however added that the account was transferred on 7 November 2017 following some worrisome accounting experiences with the previous bank being Stanbic Bank, where a misappropriation of about P2 million had been noted. 

He said the money was however recovered from Stanbic Bank hence a decision made later to transfer the Fund account.

Gaborone Bonnington South MP, Mr Ndaba Gaolathe had asked the minister whether he was aware of allegations on money laundering by Kgori Capital and government, if the allegations were true.

He had also wanted to know if government, through its parastatals have a contract with the company and if true, to state the nature of the contract.

Mr Gaolathe also wanted the minister to state the money sums involved.

The MP had also asked to minister to state, if the allegations were not true, what could have been their cause; as well as whether the minister was satisfied with the service providers’ performance and why. ENDS