The controversy surrounding the Swazi
Government’s award of a US$90 million contract to build an oil storage
facility without going through the legally-required tender process has
rekindled memories of the time King Mswati III fell for a US$5 billion
con-trick.
It involved a contract that was similarly awarded without a
public tender process and it raised doubts over the Swazi King’s ability to do
business in the international arena.
In 2009, King Mswati, who rules Swaziland as sub-Saharan
Africa’s last absolute monarch, announced he had secured US$5 billion through ‘donor aid’
to pay for two coal-powered electricity generating stations to be built in the
kingdom.
The King deliberately
bypassed the Swazi Government (which he personally
hand-picked) and the King’s Office negotiated the deal with a firm calling
itself Franken Mining.
Prince Mangaliso-Logcogco,
chair of Liqoqo, the group that advises the King, said at the time,
‘We wanted to avoid the delays, bickering and disagreements that characterise
many government projects.’
The Times of
Swaziland quoted the Prince saying the rights to coal reserves in Swaziland
had been allocated to Franken Mining.
The Times of
Swaziland quoted Prince Mangaliso-Logcogco saying that
to avoid delays in seeing the project actually taking off, government had not
been involved. He said government would only be brought on board once all
important aspects had been covered.
Prince Mangaliso-Logcogco said, ‘Land and
minerals are under the control of the King.’ He said, ‘That is the level at
which this matter is being handled.’
The NGO, the Swaziland Coalition of Concerned Civic
Organisations (SCCCO), was quick
to raise concerns about the project. In a statement it said the
project, ‘has the potential to destabilise the country, ruin the environment,
destroy communities and set back the cause of poverty reduction by many years
if not forever.’
Prince Mangaliso-Logcogco, in an
interview with the Times Sunday
newspaper, called the SCCCO ‘Judas’ and launched a bitter
personal attack on SCCCO chair Bishop Mabuza and the whole Anglican Church.
The sums involved in the power station deal were
vast: US$5 billion was roughly the equivalent of Swaziland’s entire gross
domestic product at the time. The total amount of imports into
Swaziland in 2008 was worth roughly US$2 billion.
Within hours of the King’s announcement which
received wide coverage in Swaziland itself, journalists outside the kingdom
smelt a rat when they could find no trace of a company called Franken Mining.
Swazi Media Commentary reported at
the time, ‘The deal is shrouded in secrecy. [Swazi Media
Commentary] and others have separately been trying to find out more details and
have come up against a brick wall. Top of our list of concerns is that none of
us can even find a company with the name Franken Mining. Nor is it clear which
international donor agencies have contributed the funding or what process was
gone through before awarding the contract to Franken.’
‘We are right to be suspicious since Swaziland has
a long track record of corruption and financial incompetence. It is estimated
by the Swazi Government itself that E40 million (US4 million) is lost to
corruption in Swaziland each and every month.’
It took more than 18 months before Prince
Mangaliso-Logcogco admitted the King and Liqoqo had been
conned by criminals who wanted to use Swaziland to
launder money.
In an interview in the Times Sunday in December 2010, he said the main intention for the
unnamed donors to finance the projects in Swaziland was to gain tax relief for
their respective companies and associations.
They were to apply to the US and some governments
affiliated to the European Union (EU) for their companies to be granted tax
relief because of their involvement in humanitarian activities in developing
countries across the globe.
‘We discovered that they were a syndicate hell-bent
on money laundering tactics when we checked their genuineness. I can confirm that
the projects we announced last year will not take off. We can’t deal with those
people who wanted to help us because their financial activities are not so
clean,’ Prince Mangaliso-Logcogco told the newspaper.
He did not
explain why the King ever thought Franken was legitimate,
since there was no trace of their company anywhere and the amount of money it
claimed to have to invest was so huge – about five times the size of
Swaziland’s annual budget.
In December 2014, in controversial circumstances,
the Swazi House of Assembly passed an Act of Parliament to pay a legitimate South
African company called Kantey and
Templer Consulting Engineers nearly US$90 million to build oil storage
facilities at Phuzumoya, in the Lubombo region.
The contract
had not been put out to open tender and a number of Swazi parliamentarians questioned the manner in which the deal was done.
One Senator,
Chief Kekela, said Swaziland had experienced a number of projects
that have failed as a result of companies whose profiles and credibility was
not considered. ‘We have seen companies that have come and made heavenly
promises that have however not come to effect and failed and I must say I do
not want to work on risks here as a risk is dangerous, we should not therefore
risk with the Swazi people,’ the Senator said.
See also
$5bn SWAZI POWER
PLANT WAS A CON
GOVT UNDER FIRE
IN US$90m OIL DEAL
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