China Eximbank provides RMB 700 million government concessional loan for Ha Mpiti to Sehlaba-Thebe Road Project

On March 1, 2018, the Chinese Government and the Lesotho Ministry of Finance signed a concessional loan framework agreement for the 92 km Ha Mpiti to Sehlaba-Thebe Road Project. Then, on June 1, 2018, China Eximbank and the Lesotho Ministry of Finance signed a RMB 700 million government concessional loan (GCL) agreement for the 92 km Ha Mpiti to Sehlaba-Thebe Road Project. The GCL carried the following terms: a 20-year maturity, a 5-year grace period, a 2% interest rate, a 1% service charge (or management fee), and a 0.5% commitment fee. This project involves the construction of a 92 km, 7-meter-wide double-lane road segment between Ha Mpiti and Sehlabathebe (Sehlaba-Thebe). More specifically, it will connect the highlands of Qacha’s Nek, Thaba Tseka and Mokhotlong with the lowlands and continue onward to the Sehlabathebe National Park. Anhui Construction Engineering Group and Qingjian Group Co., Ltd (CNQC) are the contractors responsible for implementation. A groundbreaking ceremony took place on December 6, 2018. However, this project has encountered major implementation delays and provoke local protests and controversy. Local residents are reportedly upset because of concerns about not being compensated (sufficiently) for their loss of land, houses, pastures and livelihoods. During the project’s construction period, it was expected that xx Basotho would be employed. However, local residents have raised concerns about CNQC’s alleged failure to recruit local labor for unskilled work. Local businesses that hoped to serve as subcontractors and suppliers to CNQC have also registered concern. One businessman, Mpota Moiloa, said he had gone out of his way to protect CNQC when it was sued by a local for quarrying sand on his site without a license. He told a local newspaper that “I have been operating a hardware shop since 2000. I have also been mining sand since 1991.” “I am currently entangled in a lawsuit with a fellow local after Qingjing asked me to step in and assume responsibility on their behalf on the grounds that they would be [penalized] more as a foreign concern. They said they would repay me with [favors] when it came to the awarding of tenders. But when I asked to supply them with cement, they told me to join the queue of those who had applied to be tenderers. They said if they considered my tender, they would want me to sell them a bag of cement for only M95. Mind you we buy a bag of cement for M97 in Matatiele (across the border in South Africa). I refused and they said they would not do business with me. They now buy from local Chinese dealers and when they do not have any stock, they go to other Chinese dealers in Mohale’s Hoek. We had hoped we would benefit from the road construction in our area but we are suffering. My business is falling apart.” One local chief, ‘Malireko Sehahle, said CNQC had not fulfilled any of the promises it made to the villagers when it began work on the project: “When the construction work started, we sat down with [CNQC] to discuss how the community would benefit or be compensated for the loss of fields. Among other things, the community wanted water tanks in exchange for quarrying by the Chinese contractor. I noticed that the contractor never objected to any of the community’s demands and promised to [fulfill] them. But to date, they have not done anything to the benefit of the villagers. I think the problem is that we never asked them to sign any document where they committed to anything. It was just a verbal agreement.” Then, in May 2021, Basotho employees of CNQC went on strike, claiming that their concerns and complaints had gone unanswered. Robert Mokhahlane, Secretary-General of the Construction Mining, Quarrying and Allied Workers Union (CMQ), told a local news outlet that the CNQC workers — who are also members of CMQ — went on strike following two unanswered petitions from the workers union. Among other complaints, Robert Mokhahlane said workers were being underpaid, and expelled from work whenever their employer wished to do so without any disciplinary hearing as dictated by the labor code order of 1992. He also said that “workers are […] punished for stolen equipment without any proof and investigations on who really stole it. They have their salaries cut without having any word with them, while those Chinese are also stealing from the company themselves.” He also told a local news outlet that that workers’ salaries have a pay-as-you-earn deduction, but the tax collection was not being remitted to Lesotho Revenue Authority by CNQC. He said that “what made us realize this is the fact that workers are never given payslips to know more about their salary details.” He further noted that complaints during the first week after the Easter break when workers demanded to be paid their owed salaries that were never paid from a Covid-19 induced lockdown In January 2021. The workers also went on strike over unsafe transportation as they travel to and from the Mpiti-Sehlabathebe road project work site. Robert Mokhahlane said that “workers are […] delivered to work in trucks, with some equipment inside and this is unsafe.” He also noted that “a woman was injured early February [2021] after falling from the truck that was also loaded with roads signs, a generator, and some other site equipment and is still at home nursing her injuries.” According to Robert Mokhahlane, under the terms of an agreement between CNQC and the Government of Lesotho, CNQC is responsible for providing food and accommodation for all its employees at a campsite. However, he said that CNQC had failed to honor this commitment since the project began in 2018.

Additional details

1. The Chinese project title is 莫比蒂-塞赫拉巴泽贝道路升级优惠贷款项目 or 称莫塞公路项目 or 援莱索托莫比蒂—塞赫拉巴泽贝道路升级项目 or 莫比蒂—塞赫拉巴泽贝道路升级项目 or 莱索托道路升级项目.

Number of official sources

28

Number of total sources

43