Saturday, July 4, 2020

BPC flat broke

The cash strapped Botswana Power Corporation (BPC) has “squashed” the P500 million government rescue package which was meant to tide them over until the end of the COVID-19 pandemic, and is now unable to pay salaries.

BPC which is technically insolvent entered the COVID-19 period with its going concern status dependent on a government bail-out. The P500 million government lifeline was however sucked into the blackhole in the parastatal’s balance sheet.Sunday Standard investigations have turned up information suggesting that the power utility is being sunk by poor scenario planning and corruption. It has emerged that the Government P500 million rescue package and the 22% increase in electricity tariffs was based on optimist projections that Morupule B would be operating at 50% capacity with two of its four units on stream.

The BPC failed to identify the cash flow crunch ahead of time and leaked millions of pula from the unplanned wholesale importation of expensive electricity. BPC is also believed to be losing money through cracks in its processes and a minister has been implicated in a corrupt business deal with the corporation which is believed to be hemorrhaging the ailing parastatal. Sunday Standard has established that for a whole month during the COVID-19 lockdown, all four Morupule B units had collapsed and Botswana had to rely on Morupule A and expensive electricity imports from South Africa. The situation is expected to get worse before it gets better.

Morupule B is currently operating with one unit, and there is growing risk that the South African power utility Eskom may be unable to meet Botswana’s import demands as South African businesses continue to reopen in stages.Responding to Sunday Standard enquiries two weeks ago BPC spokesperson Dineo Seleke confirmed that all the units at Morupule B had broken down.“As the stakeholders are aware, the Morupule B 600MW power station experiences plant reliability and availability challenges from time to time since commission of the plant dating back to 2012,” said Seleke.She added that “the current challenges are not unique, and the Corporation is undertaking the necessary remedial works on the units which are expected back in operation in course of the month (May 2020) 1st Unit, June 2020 and July 2020 for the 2nd and 3rd Unit.”  

According to Seleke, long term remedial works on the 4th Unit are at an advanced stage with construction works over 90% complete.“The next step is commissioning works which have been impacted by the COVID 19 world-wide travel restrictions as the commissioning personnel are based in China,” she said.   Notwithstanding Morupule B challenges, Seleke said, the Corporation has measures in place to meet demand over the winter high demand season from its sources supply which include power imports from the Southern African Power Pool (SAPP).  

“The Corporation encourages the public to continue partnering with them in efficient use of electricity throughout the winter season,’ she said.

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Sunday Standard June 28 – 4 July

Digital copy of Sunday Standard issue of June 28 - 4 July, 2020.