Monday, October 26, 2020

Five parastatals earmarked for privatisation

Following the privatisation of the Botswana Telecommunications Corporation Limited (BTCL) last year, the Public Enterprises Evaluation and Privatisation Agency (PEEPA) has identified five more parastatals that government should consider selling to the private sector in the near future. 

Senior Minister at the State Presidency Ministry, Eric Molale told Parliament this week that PEEPA has completed business case assessments/cost benefit analyses of five entities to progress their privatisation. 

According to Molale, the five targeted entities include Air Botswana, Botswana Meat Commission, Botswana Railways, National Development Bank and Botswana Agricultural Marketing Board. 

Although he could not commit on the likely dates for the kick start of the privatisation process, Molale said that the PEEPA assessments are in line the government’s Privatisation Master Plan II and will inform Government whether to proceed with privatisation of the entities given their current operational statuses. 

Indications are that amongst the five, Air Botswana is likely to go first. The government recently made the first step to sell-off Air Botswana after putting up an Expression of Interest (EOI) tender in local newspapers. 

Through an EOI, whose deadline was end of February 2017, the government invited private airline companies to partner with it to offer efficient and reliable air services to the needs of Botswana’s business and tourism sectors through Air Botswana. 

The EOI, which was largely publicised in the local media, is to determine the level and type of interest there is currently on the market. As such, the government says it is open to receiving proposals for privatisation including ownership, joint ventures, franchising, concessions, partnerships or any other arrangement with commercial air carriers or investors able to competently manage and run the airline.

Following the said EOI, the Chief Executive Officer of South Africa’s Comair, Erik Venter confirmed that his company wants equity in Air Botswana. Comair operates British Airways in southern Africa alongside its no-frills brand Kulula.com. 

Sunday Standard has been informed that already Comair has set aside as much as R1 billion for acquisitions and other projects which could be used to buy equity in Air Botswana. 

Although previous offers from Comair, South Africa’s Airlink and Air Mauritius have fallen through AB reports that it has since halved its operating losses to P83 million in the 2016 fiscal year ÔÇô a development that has triggered some interest from the likes of Comair. 

The airline’s financial losses over the years, blamed largely on ageing fleet as well a large workforce have prompted a five-year turnaround strategy that includes cutting costs and cancelling unprofitable routes. 

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