BPC board members implicated in Morupule B sale alleged corruption

11 Feb 2019

Botswana Power Corporation (BPC) customers may find themselves saddled with huge electricity bills while scores of board members pocket millions of Pula in kick-backs should the proposed sale of Morupule B power plant to CNEEC, a Chinese contractor go through – Sunday Standard investigations have revealed.

The Directorate on Corruption and Economic Crime (DCEC) is investigating reports that a number of government officials and Botswana Power Corporation board members are receiving bribes to push through the sale of Morupule B power station to CNEEC.

Sunday Standard investigations have turned up documents revealing that BPC management has advised against selling the power plant to CNEEC because it does not make technical and commercial sense. BPC management pointed out that the sale of Morupule B to CNEEC would increase the cost of power production by P1.2 to P2 billion per year over the next five years. As a result, electricity tariffs to the end consumer would go up by between 35% and 40% every year to cover the increase in power production costs. The BPC board sat on the recommendation from Management and kept it away from Cabinet to ensure that the sale goes through.

One board member whose name is known to the Sunday Standard is alleged to have received a P 10 000 kick back for recommending the sale to PPADB. Other board members are reported to be lining up for a huge pay day once the sale goes through.

It has further emerged that the Chinese contractor is protected by powerful allies at the government enclave and in the BPC board. The Board and Ministry of Energy have ignored recommendations from the BPC management to stop the remediation process with CNEEC and to invite other contractors to carry out the remediation project.

BPC has an unhappy relationship with CNEEC, which involves among other things a shady maintenance agreement between the Chinese contractor and some BPC senior officials which has resulted in a disputed bill of more than P 60 million.

The Sunday Standard can reveal that even during the duration of the maintenance agreement with CNEEC, Morupule B suffered many operation and maintenance failures which have affected its value.

A report compiled by the Chinese contractor between January and March 2014, before they left the site suggests that everything that can possibly go wrong with the plant actually went wrong. The report reveals how Morupule B poor operating and maintenance (O&M) practice compromised asset management, cost government a lot of money and reduced the lifespan of the plant. The contractor blamed the BPC for maintenance failures claiming that, although the plant operators were not familiar with the system, they ignored the manufacturer’s instructions on numerous occasions, threw out the operating manual and chose to fly blind.

Between January 1 and January 28th 2014 the Morupule B team had to shut down and restart unit 40 of the plant ten times. This is by far in excess of the statutory requirement of once every two years. The shutdowns and restarts involve pressure tests beyond the ordinary operating pressure of the plant and speed up the wear, tear and fatigue of the plant. The Chinese contractor confirmed that “this kind of frequent shutdown and restart shall adversely impact the equipment life cycle especially for the heating surface and pressure parts.