Friday, March 24, 2023

BPC not on a deathbed

The Chief Executive Officer at Botswana power Corporation insists that what is ongoing at the state owned energy company is reorganization.

He takes thinly veiled offence at media’s continual reference to the process as restructuring.

Early on in our interview, Stefan Schwarzfischer embarks on a long frolic to explain the difference between restructuring and reorganization.

By his account restructuring is a balance sheet problem. It happens when there is no cash anymore left in the company.

“When you embark on restructuring you are effectively saving cash in order to save the company. That is not the situation at BPC. BPC is not going to die,” he says in fast mono syllables, before adding as an afterthought, “not anytime soon anyway.”

It is a near philosophical explanation that in the end other than achieving its intended goals goes a long way to underscore his inner-lying passion.

BPC, he points out has a lot of customers.

The trouble though is that many of those customers do not pay on time.

He pauses for a second, before adding that, among the bad payers, are some government departments, ministries and other state agencies.

To drive home his story, he breaks into an anecdote in which recently the city traffic lights went off for a long stretch of time after BPC cut off the supply.

“The Council authorities,” he says before bursting into hearty laughter “had forgotten to pay.”

The matter was reported to President Ian Khama where fault was laid squarely at the BPC doorstep.

“It was not BPC fault. I was called to the Office of the President where I explained. And power is now back at the traffic lights.”

And from the contentment in his voice, to say power is back is another way of saying BPC has been paid money due to it from the Council.

Just as he completes stating the difference between restructuring and reorganization, he moves, with little prodding to yet another issue at BPC which is a media favorite; Morupule “B”.

“It is not a secret,” he starts by saying, “that Morupule B is now for sale.”

What is not true, he adds, is to say as alleged by the media that the sale has collapsed.

His take is that the negotiations proper have not even started yet.

“So how can the negotiations collapse even before they start?”

He points out that as a strategy, Government, obviously art the instance of BPC have decided to go for selective bidding.

It is a long process with many regulatory and approval requirements.

“What we want as both Government and BPC is to see if there is any basis for negotiations.

As a result the bidder, who happens to be the same Chinese contractor at the centre of Morupule B controversy, has been provided with an exhaustive term sheet to comment.

“Right now it is fair to say there are hurdles. But they can be overcome.”

If the outcome is something that Government does not like, the process will be moved to a second tier of bidders who as it is, Schwarzfischer says they are already lined up.

In the meantime, the remedial of Morupule B is being sped up.

By his own admission, Morupule B remains by far Botswana’s jewel in the crown on energy matters which might be news for many Batswana given the disdain they have to developed for the power station on account of bad publicity it has generated over the years, not to speak of the billions reported to have gone into it as both overhead costs and missed opportunity costs.

“Morupule B is the backbone of Botswana’s power supply structure. Even if we sell it we will still need it.”

It is when he talks about the country’s energy security during the fast approaching winter peak season that the BPC chief becomes unmistakably passionate.

“There will be no shortages this winter season. We have taken care of all the country’s needs.”

Many people will no doubt receive such assurances with a pinch of skepticism.

It is a kind of assurance they have received many times before only to get it broken as many times.

“Nevertheless, there are back-ups. It makes business sense to have such backups,” says Schwarzfischer.

Unlike in the previous years, the recently signed contract with South African utility ESKOM has been drafted in such way that power from the SA giant will only be used and paid upon demand and use.

Before using power from Eskom, the BPC will have to fully utilize supply Southern African Power Pool which is much cheaper.

“From now on Eskom will supply us under the ‘Pick and Pay’ arrangement. This means we only pay for what we need.”

In the meantime BPC is engaged in at least two joint projects to build solar power plants supplying 100 megawatts each.

“Expression of interest is coming up soon. We are yet to decide on whether to build the two in two different places ÔÇô one in the north and the other in the south.”

To cut transmission costs especially in the rural areas, BPC is now introducing what the CEO calls “localized power plants.”

This means a power station of appropriate size will be built in a locality where there is demand.

Another project that Schwarzfischer has in his hands at BPC has to do with fighting the connection backlog.

By his admission, BPC is not connecting customers fast enough. “And this has a bearing on the economy. Part of reorganizing this company is to improve service delivery. ”

Just as the interview draws to a close, the CEO takes it back to where it started and immediately turns REORGANISATION into a key word.

“I am excited with what we are doing. New talent has been unearthed. Of course it means some members of the executive will leave, but not all. What we are doing is to make the reorganization excise as fair as possible.”

Has there been any resistance?

“BPC like many parastatals is not used to what I am doing here. To many people this is a huge cultural shock. The fact of the matter is that if you do not perform, you simply leave. It started at Executive level. And we are running the process down. The good thing is that for all of this reorganization, we will not asking any money from the shareholder,” says Schwarzfischer.

If any money will be needed from Government, it will be yet another ambitious project that BPC is currently grappling with, which is a transmission line that joins parts of the North West, Chobe and Okavango Districts to the national grid.


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