Ghost of doomed Palapye glass project haunts Govt.

Nicholas Mokwena BG reporter
Thursday, 27 September 2018
 Nijel Dixon-Warren Nijel Dixon-Warren

Government is currently looking into alternative use of land for the controversial Palapye glass project that cost the Botswana Development Corporation (BDC) over P500 million.This was revealed by Permanent Secretary in the Ministry of Investment, Trade and Industry, Peggy Serame. 

The project was in 2016 expected to be auctioned but interested bidders pulled out. Provisional liquidator for the Fengyue Palapye Glass project, Nijel Dixon-Warren, reportedly confirmed that his meeting with two potential buyers back then did not bring any desired outcome. 

Serame told Parliamentary Public Accounts Committee (PAC) that following the liquidation of the project there were potential investors who wanted to take over the project. According to the PS after inspecting the plant the investors decided that they are no longer interested in the project.“Their reasons have been that the project would no longer be viable.

So currently we do not have any interested party in the project. We met recently to explore other options. We want to alternatively see what we can use the land for,” she explained. The 100-hectare property is located adjacent to the Serowe-Palapye junction.
The property was reportedly expected to fetch between P25 million and P180 million through auction in 2016. Among the goods on site are float glass plant and equipment, coal gasification plant, construction plant, and oxygen plant. 

The project stirred controversy after it emerged that the Chinese company that was in partnership with BDC was a shelf company with no experience whatsoever in glass manufacturing. There was also confusion as to which company was in the project between Fengyue China and Fengyue of Cayman Islands.

In 2013 Parliamentary Special Select Committee of inquiry into the BDC found that the Palapye glass manufacturing project was bound to fail as it was premised on poor diligence, doubtful partner selection and a litany of project implementation violations.The report revealed that BDC opted to go into a joint venture with Chinese Shanghai Fengyue Glass Company, ignoring their function of encouraging citizen partnership in national business ventures.

It emerged that the company was appointed although it did not have the required technical expertise. BDC board members were also said to have been kept in the dark with regard to the partner selection process. Findings further revealed that the project was originally estimated to cost P309 million but ran additional costs which increased to over P500 million.

The appointment of an engineering, procurement and construction (EPC) contractor agreement between Fengyue Glass Manufacturing (Botswana) and Shanghai Fengyue Glass Corporation also raised eyebrows.

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