$5bn SWAZI FRAUD IN THE MAKING?

Are the Swazi people about to be the victims of a gigantic 5 billion US dollar (E50 billion) fraud?

Suspicions have been aroused following media reports in Swaziland that King Mswati III has been guaranteed this amount of money in donor aid to pay for two coal-powered electricity generating stations to be built in the kingdom. The King’s Office has deliberately not involved the Swazi Government in negotiations for the deal.

According to reports, a company called Franken Mining has been appointed to oversee the project.

The deal is shrouded in secrecy. Myself 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 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 ministers cannot be trusted to spend money wisely.

It was only after the jet deal became public and attracted outrage both inside and outside Swaziland that the purchase was abandoned, but the E28 million deposit was lost.

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 of Swaziland 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 Times of Swaziland quoted Prince Mangaliso saying that to avoid delays in seeing the project actually taking off, government has not been involved. He said government would only be brought on board once all important aspects have been covered.

Prince Mangaliso said, ‘Land and minerals are under the control of the king.’ He said, ‘That is the level at which this matter is being handled. Government is not yet involved because we wanted to avoid the delays, bickering and disagreements that characterise many government projects.’

Frans Whelpton, a professor specialising in traditional law at the University of South Africa, is reported to be in charge of the project. Prof Whelpton made news recently for his involvement in securing E100 million of humanitarian aid for Swaziland after he was tasked with trying to get the E28 million jet deposit returned. This he failed to do, but the aircraft manufacturer is said to have made arrangements for E100 million of aid to be donated to Swaziland as a humanitarian gesture.

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.

The secrecy behind the power station deal is raising concerns among civil society. The Swaziland Coalition of Concerned Civic Organisations (SCCCO) says, ‘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.

SCCCO questions the validity of the project and remains suspicious about who Franken Mining is. It also has concerns about the expertise of the people involved in taking decisions and managing the project.

There are many unanswered questions about this project and there are many unsubstantiated reports going around about some of the key players in it. None of us yet have the full picture about this deal.

If readers of this blog have any more details, please let me know.