SWAZILAND KING LOSES POWER

First there was a media fanfare to announce a plan to build a 5 billion US dollar (E50 billion) power plant backed by donor money and supported by King Mwsati III who confidently guaranteed the money to pay for it was in place and it was all systems go.

And now news dribbles out that it’s not going to happen.The plan was to produce 1 000 MW of electricity (even though Swaziland at present only produces 70 MW through hydro electricity) to fulfil all the kingdom’s energy needs and to export some to neighbouring South Africa.

To save face (whose? The king’s?) we are told that the plan will not go ahead as planned but will be scaled down. But we are told, there will be a new electricity plant. Honest. No, really.

When the plan for Franken Mining to build the plant was first announced in April 2009 myself and others in Swaziland questioned whether the Swazi people were about to be victims of a gigantic fraud.

The office of King Mswati deliberately kept the plans from Parliament, with Swazi National Council (Liqoqo) chairman Prince Mangaliso playing a prominent part.Suspicions were aroused because no one could trace a company called Franken Mining.

At the time, the Times of Swaziland quoted Prince Mangaliso 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 said, ‘Land and minerals are under the control of the king.’

The secrecy behind the power station deal raised concerns among civil society. The Swaziland Coalition of Concerned Civic Organisations (SCCCO) raised 20 specific questions about the deal and said, ‘In any normal society, the people would not be presented with decisions without some, if not a lot, of consultations.’ It remains a mystery why Franken Mining was chosen for the project and what tendering process was followed before contracts were issued.

According to a report yesterday (13 October 2009) from Reuters news agency, the original plan has been scaled down. Swaziland Electricity Company (SEC) still wants to build a coal-fired plant, but on a much smaller scale.A feasibility study will be conducted first, SEC said.

According to Reuters no reason for the scaling down of the project was given, nor has a source of funding been found for the project.

There are many questions to be asked about this project but let’s start with this one: How is it that King Mswati, sub-Saharan Africa’s last absolute monarch, had the money to build the plant in April, but by October the money is no longer there?

$5bn SWAZI ‘FRAUD’ MYSTERY DEEPENS

The mystery is deepening over an alleged 5 billion US dollar (E50 million) deal to build power stations in Swaziland.

When news that King Mswati III had secured this amount to pay for a company called Franken Mining to build coal power stations broke earlier this month (April 2009) suspicions were aroused because no one could trace a company called Franken Mining.

The waters got murkier when it was revealed that the Swazi Government had not been involved in any negotiations over the project: instead King Mswati deliberately by-passed ministers and his office made the deal itself.

Now, comes further disturbing news about the company at the centre of the deal: Franken Mining.

The Times of Swaziland, the kingdom’s only independent daily newspaper, reports today (27 April 2009) that it has hit a brick wall in its search to find Franken Mining.

It reports, ‘The Times is in possession of correspondence between the company and local officials, who include Reverend Absalom Dlamini, former Minister of Economic Planning and Development and Prince Mangaliso, now referred to as Chief Logcogco.

‘These letters have telephone numbers (both fixed and mobile) as well as a postal box address. They also have an email address.

‘For the last four or five weeks, the landline number listed has not been functioning.Dialling ignites an automatic message purportedly from Telkom South Africa.

‘The message says: “The number you have dialed does not correspond to a subscriber in service.”

‘The mobile phone number is always on voicemail and a recorded message informs the caller not to leave a message, as one will be sent automatically to the owner.

‘According to the letters in our possession, Franken Mining’s postal address is at Menlo Park in Pretoria, South Africa. The deal is also to be facilitated by Professor Frans Whelpton. Professor Whelpton’s name became known when it was linked to negotiations for the return of E28 million paid as a deposit for the king’s jet.’

I questioned the deal in a blogpost on 8 April 2009 and asked if the Swazi people are about to be the victims of a gigantic fraud.

Myself and others working independently have been trying to piece together the background to this deal. Chief among our concerns is that 5 billion dollars is said to be available through donor aid to pay for two coal-powered electricity generating stations to be built in the kingdom but there is no evidence about which international donor agencies have contributed the funding or what process was gone through before awarding the contract to Franken.

Swaziland has a long track record of corruption and financial incompetence and it is estimated by the Swazi Government itself that E40 million is lost to corruption in Swaziland each and every month. Also, the long running saga of the E28 million that was secretly (and illegally) paid as a deposit by the Swazi Government to buy a private jet costing E720 million for King Mswati indicates that Swaziland’s rulers cannot be trusted to spend money wisely.

What we do know about the latest power station project is that it is connected to King Mswati through the Swazi National Council (Liqoqo), the king’s advisory body. Prince Mangaliso, chair of the SNC, confirmed to the Times that funding had been secured on behalf of the King’s Projects. He said the rights to coal reserves in Swaziland had been allocated to Franken Mining.

The sums involved in the power station deal are vast: 5 billion US dollars is roughly the equivalent of Swaziland’s entire gross domestic product. The total amount of imports into Swaziland in 2008 was worth roughly 2 billion US dollars.

RAGE AT $5bn SWAZI ‘FRAUD’ REPORT

It seems those of us who have questioned King Mswati III’s 5 billion US dollar (E50 billion) power station scheme have touched a very raw nerve.

We are asking how a company called Franken Mining (which nobody can find a trace of) managed to secure a deal using international donor funds, without anybody having to go through an open tender process. We also are alarmed that King Mswati has deliberately by-passed the Swazi Government because, according to Prince Mangaliso, chair of the Swazi National Council (SNC), the close adviser to the king, ‘we wanted to avoid the delays, bickering and disagreements that characterise many government projects’.

The secrecy surrounding the deal and concerns about corruption have been raised both in Swaziland and internationally. Leading the public concern is the Swaziland Coalition of Concerned Civic Organisations (SCCCO) which says the project for two coal fired power stations ‘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.’

SCCCO asked for 20 specific questions to be answered about the project ranging from the bone fides of Franken Mining; how the deal was organised; who has the expertise to make the project work and where the money was coming from.

These are all pertinent questions and in a society that had good governance and transparency the answers would be readily available.

Instead, SCCCO’s questions got a furious response from Prince Mangaliso. Even in Swaziland where public debate is rarely temperate, the Prince’s outburst was exceptional. In an interview with the Times Sunday, he Prince called SCCCO ‘Judas’. He went on to launch a bitter personal attack on Bishop Mabuza, the chair of SCCCO, and then, in what can only be described as a rant, attacked the Anglican Church.

What the Prince didn’t do was answer any of the questions. His response is revealing because it is out of proportion. I suspect he and the others at the heart of this dodgy deal are angered that it has become public before they are able to deliver it signed and sealed.

The questions, SCCCO want answered are as follows:

1 No-one can find any independent reference to a Company called Franken Mining – what is its background, experience, and financial capacity to undertake a project of this size. Who are the directors?

2 How was Franken Mining chosen and why was an auctioning process not used?

3 Why is there talk of donors when private equity could develop and run this project?

4 Will the Swazi Nation or Tibiyo borrow any money to help fund this project? If so what are the repayment terms?

5 What specific experience does Professor Whelpton have in international mineral extraction contract negotiation?

6 Who else is in the Swaziland Negotiating Team, what relevant skills and experience do they have and how were they chosen?

7 What is their mandate, what are the limits of their mandate, who are they responsible to?

8 What expert support do they have access to in terms of legal, economic, business, environmental, geological, technical, policy impact, poverty reduction, taxation etc?

9 What arrangements will be in place to ensure that the income generated goes towards developing a sustainable future for Swaziland?

10 What oversight arrangements will be in place to ensure equity, and fairness?

11 Given that this type of project does not feature in the Poverty Reduction Strategy will the strategy be readjusted to take it into consideration?

12 Given the attitude of Prince Mangaliso, that government involvement and oversight is an unnecessary hindrance, when will government become involved?

13 At what stage does the negotiating team expect to carry out environmental impacts, water usage and social impact assessments?

14 How will these assessments feed into the negotiating process?

15 Will there be parliamentary oversight or ratification of the process?

16 What consultation will there be with civil society, business, affected communities etc?

17 When will the cost benefit analysis be available?

18 What analysis has been done on opportunities for corruption and what measures are being undertaken to prevent them?

19 What comparisons to other similar projects have been undertaken, were renewable energy sources considered?

20 Is the Prince aware of the Extraction Industries Transparency Initiative and the United Nations Resolution on Strengthening Transparency in Industries and is it prepared to support the processes that they advocate for? If not, why not?