Standards Institution project hits wall over unpaid bills

Lesotho is finally taking concrete steps toward building its own comprehensive quality infrastructure, a belated move that is vital for boosting business competitiveness and securing wider market access.

The establishment of the Lesotho Standards Institution (LSI) represents hope for the country’s hesitant approach towards safeguarding consumers’ safety, by being able to define, monitor, and enforce its own national standards after decades of dependence on the neighbouring South Africa’s quality infrastructure.

Created under the Lesotho Standards Institution Act of 2014 and officially operationalised in 2021, the LSI carries an extensive mandate. Its responsibilities include developing and publishing standards, testing products, conducting inspections, and certifying compliance with technical specifications.

These functions are central to safeguarding consumer safety, improving product quality, and strengthening export readiness.

However, just as the country hopes to catch up with its regional peers in developing its fully fledged national standards body, significant financial setbacks now threaten to undermine the construction project of the institution’s headquarters.

The M259-million project, which is to deliver a two-storey, 10,000-square-metre facility at Ha Tikoe industrial area, broke ground in January 2025. Scheduled for completion in May 2026, the building is designed to house laboratories, training spaces, and administrative offices to serve as the nerve centre of Lesotho’s standards framework.

Although 20 percent of the preliminary work, largely bulk earthworks, has already been completed, the project has run into early turbulence.

The contractor, Qingjian & Founda Joint Venture (JV), has raised an alarm over prolonged non-payment. Despite Parliament allocating M85 million for the 2025/26 financial year, the JV reports that it has not received any payment since construction began, even though monthly invoices have been submitted.

“Since we have been here, we have not received any payment for the past seven months. We have been paying staff salaries and carrying other works from our own pocket,” said George Zizhou, the project manager, on Monday this week.

He explained that the lack of payments has forced the contractor to self-fund essential operations, including procuring long-lead items such as lifts, paying subcontractors, and covering wages. Without urgent resolution, he warned, the project risked stalled progress, supply-chain breakdowns, and quality compromises.

In response, the Ministry of Trade, Industry and Business Development, which oversees the project, acknowledged the delay but attributed it to administrative processes.

Lihaelo Nkaota, the Ministry’s spokesperson, told Newsday that the joint venture’s formal registration, a prerequisite for releasing funds, was only finalised in May.

“While the project commenced earlier in the year, the formal registration of the joint venture which is an essential prerequisite for the processing of any payments was only completed in May,” Nkaota said.  

She said additional delays were linked to leadership changes within the finance department, with a new director requiring time to review ongoing projects.

“Additionally, there has been a recent transition in leadership within the finance department, with the recent rotation of the Director of Finance. With this transition, the new director needs a period of familiarisation with ongoing projects and associated documentation, which has understandably introduced some delays in the approval process.

“As this is a capital project, the release of funds requires a structured process involving coordination with the Ministry of Finance. This includes formal communication and authorisation steps that are essential to ensuring fiscal responsibility and adherence to budgetary protocols,” Nkaota said.

The ministry further assured that during a meeting with the contractor on September 5, explanations were given and commitments made to fast-track the payment process.

“We understand the importance of timely payments.  In fact, during a meeting held on Friday, 5th September, the contractor was fully briefed on the causes of the delay and was assured that all efforts are being made to expedite the process. We remain committed to resolving this matter promptly and ensuring that the project continues without further disruptions,” she added.

A government-wide payment delay problem

Despite the ministry’s justification, the situation underscores a broader and recurring challenge of the government’s chronic struggle with timely supplier payments.

In December 2022, Finance Minister Dr Retšelisitsoe Matlanyane told the National Assembly that the government owed in excess of M1 billion to its suppliers.  By January 2023, she said the government was unable to pay M690 million in supplier arrears dating back to the 2021/22 financial year.

She said the government had been struggling to meet its financial obligations since 2014 due to declining revenues amid growing spending.

And now these systemic weaknesses in government appear to be spilling over into one of the country’s key economic projects, and threatening to derail the long-term plan of achieving business competitiveness and securing wider market access for local products.

Unforeseen on-site issues  

Apart from the issue of unpaid invoices, other technical setbacks have added to the difficulties of building the LSI house. During foundation phase, engineers encountered a water table too close to the surface, forcing an unplanned redesign of the foundations works.

“The other issue we had to deal with was the groundwater conditions of the site. When we started working on the foundation, we realised that the water table was too close to the surface, so we had to redesign the foundation, which cost us some considerable time. But we are now done with the foundation.”

Although the adjustments have since been completed and pile work is set to begin, the problem caused further delays and potential cost overruns.

Bereng Mpaki