Saturday, September 26, 2020

BPC big contracts open new frontier in state organized corruption

A suite of multi-billion pula energy and transmission contracts and tenders on the pipeline at the state owned power utility, Botswana Power Corporation have gotten many of the  usual corruption suspects lining up for a share of the loot, Sunday Standard has been able to establish.

Even before most of the contracts have been awarded, BPC has been elbowed out by the parent ministry raising new concerns over quality and security of the projects.

As it is the ministry is bracing itself to take the lead at both negotiations as well as procurement of the contracts.

The tussle between BPC led by the Board and executive management on one hand and the ministry led by the minister on the other  promises to be untidy given the stakes.

A glaring example, said a government official has been a decision taken last week by cabinet to approve a decision to restart the negotiations of Morupule B with the Chinese contractor.

Botswana Power Corporation was sidelined in the decision, he said.

First round of efforts to sell Morupule B, a P15 billion troubled power plant behemoth fell through earlier in the year after the Chinese contractor made excessive demands on Botswana Government.

BPC has been of the view that Morupule B is a national asset of immense value and should thus not be sold, arguing that ongoing remedial works done at the expense of the contractor should be allowed to run their course.

According to calculations given to Government the sale of Morupule B will see electricity prices increasing 25%, or P1.4 billion a year for the next thirty years.

It is the customer who will pick the tab.

It is however not clear what has since changed as to convince cabinet, led by President Mokgweetsi Masisi to once again open a path that would lead selling Morupule B to the Chinese after the collapse of previous efforts.

Another major energy related decision recently taken has got to do with negotiations of power imports between Botswana and Mozambique.

In this decision too, BPC has also been nudged off, out-maneuvered and given a cold shoulder as negotiations will be led by the ministry.

“It would seem like we have not learnt from our past mistakes. Our past agreements with Eskom [the South African Utility] were terrible. They were only corrected when BPC came in and made Botswana a premier, top priority client,” said the same official who talked to Sunday Standard on condition of anonymity.

Even with regards to ongoing remediation efforts at Morupule B, the BPC was not involved in a team that went to cut a deal in China.

That team included ministers from Foreign Affairs and that of Energy, among others.

Government has recently come under pressure to provide sovereign guarantee to Marubeni Corporation, a major Japanese electricity company to build Morupule 5&6.

While at official level the ministry is pushing for the idea, there are officials who hold a strong view that this investment is not needed, not least because it would be 40% more expensive than Morupule B.

Under the current economic climate, that should not be a national priority, especially given that Botswana is not expected to experience any power shortages for years to come.

The official who is also an engineer said given the current projections, there “absolutely” no need for new investment at Morupule 5&6. He said the priority should be about not selling Morupule B, but rather sorting out its problems. He added that once Morupule B is fully functional, Botswana will have so much power as to start exporting a substantial portion of it.

“There is no need to build a new power plant. This is not about the country. It is about enriching a few individuals. It must all be looked against the current state of the economy where Botswana Government has reached its sovereign guarantee ceiling,” he said.

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