Thursday, October 28, 2021

Khama mum on ‘known’ Morupule B sale

President Dr Ian Khama has not said a word regarding the possible sale of the country’s biggest power plant ÔÇô Morupule B. 

When making his State of the Nation Address (SONA) on Monday, Khama instead told the nation that the power station is still undergoing remedial works. 

“The existing Morupule B is still undergoing remedial works, our energy supply is being supplemented by the Orapa and Matshelagabedi Diesel Peaking Plants,” said Khama. 

On other issues relating to power supply, Khama said that the Botswana Energy Regulatory Authority, which is expected to become fully operational in the coming financial year, has been established to facilitate further expansion and diversification of the energy sector.

“Independent power producers are being procured for the development of an additional 300MWs by extending Morupule B with units 5 and 6. We are also in the process of refurbishing Morupule A plant,” Khama said. 

Although the expectation was that Khama would shed more light on the proposed sale of Morupule B, indications are that, through the sale, Botswana intends to recoup all the money that it has spent on the construction and maintenance of the troubled power station. 

Despite Khama’s silence on the matter, in early November, Sunday Standard reported that Cabinet had since agreed to sell the troubled power station for an undisclosed bargain basement price. 

Still in early November, in a memo addressed to Botswana Power Corporation (BPC) staff, the corporation stated that over the past few months the company together with the shareholder had been looking at options of ensuring security of supply and making the corporation financially viable again.

The memo further states that the BPC has been running at a loss for the past eight years (since 2009) and given the pressure and competing priorities, the Botswana government can no longer sustainably support the corporation.

“It is on this note that the shareholder made a decision to sell one of the assets of the Corporation being Morupule B 600 MW Power Plant to ensure reliable power supply and reduce the Corporation’s debts,” reads the statement.

BPC executives said then that Morupule B had proven to be costly to maintain and operate due to construction and equipment defects and the decision to sell the power plant would go a long way in alleviating this situation.

Although information is still sketchy, sources close to the sale told this publication that the plant was being sold for about half its construction costs to China National Electric Equipment Corporation (CNEEC), the Chinese contractor that was commissioned to build the plant under controversial circumstances.

The plant, which has already accumulated cost over-runs in excess of P8 billion, was initially budgeted for USD 905.4 million (P9.8 billion) but costs had ballooned to USD 1.660 (P18 billion) in 2014 when the Chinese contractor was kicked out of the site. The current figure is believed to be much higher. 

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