Monday, March 8, 2021

Electricity tariffs to go up next month amid black outs

Botswana Power Corporation (BPC) has been given the go-ahead to increase its electricity tariffs ÔÇô a move which will be difficult for consumers to handle amid a series of power cuts that have hit business and households alike in the past three weeks.
Minister of Minerals, Energy and Water Resources, Kitso Mokaila, told parliament this week that the state-owned power utility has been making financial losses as a result of charges that are not ‘cost reflective’.
“To this end tariffs will be adjusted by an average of 10 percent with effect 1st April 2014,” he said.
However, to cater for low income household and small industries Mokaila said the increase on the first 200 units and 500 units will be 5 percent and 6 percent respectively.
Analysts are yet to quantify how the pending adjustment will affect the domestic inflation which is currently at 4.4 percent after a slight rise in January.
BPC Spokesperson, Spencer Moreri, stated in an interview that unscheduled load shedding will be imposed for hours longer than the usual four hours sometimes countrywide. He said if things go according to plan, the situation will only be brought under control in April.
“The situation may become worse before it becomes better should Eskom go ahead with its warning to switch off electricity exports to Botswana.” he warned.
Mokaila this week admitted that achieving project closure for the 600 MW Morupule B power plant continues to be a challenge. Whereas the construction and commission phase of the plant are almost complete and three units have been taken over by BPC for commercial operation, frequent boiler failures is said to be resulting in low availability of plant which turns out into massive load shedding.
An assessment of boiler failures is said to have been carried out by the main contractor (CNEEC)’s sub contractors late last year who advised that the boilers were not constructed in accordance with the engineering design and that workmanship was of below standard.
The main contract was revised and an interim contract for the maintenance and operation of Morupule B was signed on July 2012 and ended on July 2013.
According to the documents seen by Sunday Standard, the interim contract was extended from July 2013 and ended December 2013. The two parties once gain entered into negotiations and the contactor refused saying some of the conditions proposed by BPC were unreasonable.
The BPC is yet to pay the contractor for the balance of the operation and maintenance interim contractor after it handed the button to a Germany company called STEAG.
“BPC entered into an Emergency Agreement with Steag form operations and maintenance of the power plant from 1st January 2014 to 30th April 2014,” Mokaila confirmed to parliament this week.

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