The Other Jackpots


By S.C.

Last week in commenting the legal and political imbroglio surrounding the unilateral termination by Government of the long-term contract for the ferrying of our fuel requirements from Mangalore, known as the Betamax contract, sometimes referred to as a “jackpot”, we noted that the International Tribunal (Singapore) pronouncement in favour of the complainant was still under appeal by State Trading Corporation to our Supreme Court.

There are obviously many administrative and legal aspects to the debates and the underlying issues between two parties which have entered into a commercial services agreement with international ramifications, which as laymen we can recognise. Government’s stance in 2015 was to refuse renegotiation of contractual terms it found unacceptable. It also refused application of the contractual exit clause with compensation which might have cost the country, on balance against securing the Red Eagle, some Rs 1 billion. We understand that such an avenue might have been raised or recommended by its own legal experts if not the State Law Office.

Government has at various times claimed to have been overpaying Betamax without really providing credible independent evaluation of the extent of such overpayment compared to alternative one-off shipments by private carriers. But the main thrust of its legal argument was that the contract was “illegal” by virtue of by-passing some provisions of the Public Procurement Act concerning services provided in connection with the purchase of goods.

Nonetheless, in apparent contradiction of that stance, government and its best-rated legal counsel team accepted to defend its case before the Singapore International Arbitration Tribunal, as provided for it seems in the “illegal” contract, where it lost its case. The consequent Award for heavy damages, which would have placed the burden of forking out some Rs 5 billion to Betamax on public shoulders, has now been opportunely reversed in last week’s lengthily substantiated Supreme Court judgement.

While we can all heave a sigh of relief, there was also little doubt in anybody’s mind that whatever the outcome at our highest local judiciary instance, either the STC or Betamax, as litigants, would have taken the matter to the ultimate appeal institution, the Law Lords of the Privy Council to delve into the underlying complex issues of this commercial contract, its legality and terms, and whether damages for termination are applicable.

As might have been expected, government spokespersons, including the Attorney General, have been quick to pounce on the judgement as “final” and a vindication of its initial stance of outright contract termination. It was also confidently implied that the Indian Supreme Court, in its autonomous deliberations, would have to take stock and abide by what appears as an interim legal judgement pending final resolution of all appeal mechanisms. That remains to be tied up or confirmed. The mood in government quarters, battered by an ongoing barrage of allegations of financial affairs and improprieties, is certainly upswing, but open celebrations may be premature at this stage, however much, as ordinary citizens, we would welcome the saga to end without further digging massive holes in the Treasury and our pockets.

Despite the above context of an unfinished legal quandary, the spotlight was also rapidly turned, curiously both by MSM stalwarts, the Police Commissioner and by Mr Berenger, onto the Office of the Director of Public Prosecution (ODPP), who, on the basis of police evidence acquired up to November 2016, had advised that there was not sufficient evidence against any of the political and administrative protagonists Police had brought provisional charges against. A letter from the CP within two days of the SC judgement, requested the ODPP further advice regarding its own course of action.

On June 4th, the latter made public its rather predictable reply that (a) the SC judgement in no way put into question its legal advice delivered on 23 November 2016 and submitted on the basis of the police file, the police evidence, the AG’s vetting and approval of the legality of the contract; (b) “the ODPP has advised the Commissioner of Police that he may wish to carry out further investigation with a view to determining whether offences may have been committed under the PPA in the present matter”. In other words, following the SC judgement, the CP has sufficient constitutional authority to revise or complete other rounds of investigations on the alleged criminal matters, before coming back to the ODPP or to Courts for another bite at the cherry.

In the meantime many important questions have been raised regarding the resilience of our public procurement processes, the independence of institutions, the credibility of top echelons of our administrative cadres, the allocation of mega-contracts without meeting accountability and transparency concerns, and a host of ancillary issues which have been increasingly manifest since early this century and have roped in all of our main political parties.

Down even that short memory lane, one might find awkward questions regarding the “contrat en béton” imposed on the Ministry of Education for rental of office space in the Sun Trust building. One might find more awkward questions regarding IPP bids and offers for coal-powered electricity stations using bagasse, if and when available, as a prop.

Or the “Ilovo-‘mari deal’ of the century” when, according to then economic advisor Jean-Mee Desveaux, the MSM-MMM government, balking at economic democratisation, reversed the terms of the proposed public-private joint venture, guiding and facilitating the sale and control of an unexpected amount of prime sugar cane lands, to a consortium of our existing landlords with massive financial sweeteners. All successive governments have had to live with such extravaganza, even when they were desperate for lands re-purchased from the same private sector to meet social, educational or infrastructure needs.

The terms and conditions of such a deal have been a hot political potato for years but suffice it to note that with the advent of widespread property speculation through Smart Cities, these conglomerate-owned lands are currently worth their weight in gold while a cash-strapped and heavily debt-laden government has again, in its wisdom, foregone fiscal revenues to the tune of several billions annually. Have those successive and cumulative jackpots been evaluated or do jack-fruits and jackpots have a particular flavour in Mauritius, reserved for some category of entrepreneurs?

* Published in print edition on 7 June 2019

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