Wednesday, October 20, 2021

China powers in for Morupule B

A high-level delegation led by senior officials from the Chinese government is due in Botswana this week for what has all the trimmings of a heated negotiation between the two countries over the sale of the Morupule B power station. 

State-run China National Electric Equipment Corporation (CNEEC), which was commissioned to build the plant in 2010, has agreed to buy the power station. 

The two countries’ governments are expected to come up with a road map for the post-Morupule B sale during the negotiations. 

Mineral Resources, Green Technology and Energy Security Minister Sadique Kebonang confirmed this week in an interview with Sunday Standard that government has assembled a strong team to meet the high-level delegation from the Chinese in what he described as “broad-based negotiations”.

According to Kebonang, the Botswana team will include officials from the Ministry of Finance, the Directorate on Corruption and Economic Crime (DCEC) and Directorate of Security and Services (DIS), among others. 

“We have written to the Chinese offering them to sell Morupule B power plant. They will be in the country next week,” said Kebonang. 

He confirmed that since CNEEC is a state-owned company, the delegation would be led by Chinese government officials including senior officials from the contractor.

“We anticipate a process that will involve everybody. The negations are going to be broad based. By this I mean that the negotiations will include anti-corruption agencies like the DCEC and DIS as well as the Ministry of Finance,” he said.

Asked why state agencies would be involved in the negotiations, Kebonang explained that government’s intention was to make the negotiations as transparent as possible.

“We want to ensure that the process is transparent and there are no elements of corruption. We are open to scrutiny and that is why we have involved anti-corruption agencies and the media will also be involved in this sale; it will be (the media) furnished with the information that they need as quick (sic) as possible,” he said.

Should the issue fall through, Kebonang said, then the idea of approaching the London Court of International Arbitration (LCIA) the International would arise.

“The issue of approaching that court is not important for now because we are still talking to the same person who constructed the power plant to buy it back. If the deal falls through then we will ask them to perform according to the contract and that is when the issue approaching the court may arise,” he said.

According to Kebonang, Botswana intends to recoup all the money that it has spent on the construction and maintenance of Morupule B.

“Should the deal succeed, then there will be no financial burden on us. We will have lost no money,” he said. 

Kebonang said that the amount of money that Botswana has spent on Morupule B is in excess of P12 billion.

On concerns that the government could have consulted the nation before putting up the power plant for sale, Kebonang said a lot of money had been spent on Morupule B and more delays would have proven disastrous.

“Remember that this was the decision of Cabinet and when dealing with public assets we have a mandate to negotiate on behalf Batswana. This is not about politics but about the country,” he said.

According to Kebonang: “Our view is that Morupule B has never been profitable. It was collapsing Botswana Power Corporation (BCP). Every time there were breakdowns and more money coming in. It would have been disastrous if we had to wait longer.”

But Kebonang hoped the sale would be successful and that negotiations and cooperation between the Botswana government and CNEEC will continue.

A source close to the impending negotiations told Sunday Standard that aspects of the negotiations that are contentious include among others the sale price because Botswana wants to “engage obviously in the liabilities of the contractor in terms of the amount of money we have spent in importing power and other consequential costs that may have occurred”.  

The Botswana government, the source said, has spent a lot of money in importing power rather than getting it from the contract it signed with CNEEC.

Another issue that is likely to lead to heated exchanges between the negotiators is Botswana’s position that it wants CNEEC to take responsibility for the consequential loss as a result of frequent breakdowns of the facility and failure to hand over the plant to the government on the agreed time.

But the Chinese delegation is expected to consider these demands with a pinch of salt.

Kebonang’s predecessor Kitso Mokaila told Parliament early this year that in terms of completion date, the contract was that Unit 1 would be handed over on January 15, 2012, Unit 2 on April 15, 2012, Unit 3 on July 15, 2012 and Unit 4 on October 15, 2012.

“That was what was contractual. But as you will know, that did not happen. In fact Unit 1 was delivered on July 21, 2013 which made it 18 months late. Unit 2 was on May 4, 2014, making it 25 months late, Unit 3 on July 24, 2018, 12 months late and Unit 4 on September 13, 2013,” said Mokaila.

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