The recent announcement by the board of the Botswana Power Corporation (BPC) of a joint decision made with the Ministry of Minerals, Energy and Water Resources that the power utility should become subject to a Management Contract for a period of three years is indeed a welcome development.
The decision by the BPC board and the minerals and energy ministry to hand over operations of the Botswana Power Corporation to global energy company ESB International (ESBI) comes at a time when globally management contracts are gaining popularity as an element of commercialising power utilities.
We read elsewhere that ESBI has done consultancy work for power utilities in both South Africa and Namibia while at the same time other countries such as Madagascar, Tanzania, Kenya, Rwanda and neighbouring Namibia and Lesotho have in the past introduced management contracts in their power sectors.
As the board chairman, Sebetlela Sebetlela rightfully said, the arrival of new blood in the form of consultants at BPC brings hope that the Corporation will ultimately achieve performance turnaround and organisational transformation. Indeed the time for BPC to have a business model and be independent from Government has long been over due.
We understand the decision was taken pursuant to a Business Operations Review consultancy that was carried out on BPC by ESB International Limited in 2013. It is imperative that BPC be transformed from its current operating status to a financially viable power utility and a BPC 2018 end state strategy has been developed to achieve this.
Recently BPC was named amongst the four of Botswana’s major parastatals which are technically insolvent after years of mounting operating losses. The Auditor General’s report for 2013 fairly indicates that the situation is more critical than we thought. That the national electricity utility is already having cash flow problems and is failing to honour its debts is actually old news.
The working capital position of the corporation is also in bad state. By close of books on 31 March last year the BPC showed that its current assets were valued at P1.19 billion while on the other hand current liabilities stood at P3, 73 billion, giving a net current liabilities position of P2.54 billion.
The consolation though comes in the fact that the new BPC board seems to be awake to the fact that a moribund organisation like the BPC requires strong leadership, particularly when faced with tight deadlines such as such those under which the ill-fated Morupule “B” power station was constructed.
As we had previously noted, the BPC has for a very long time been allowed to become a feeding pot, not just for bogus Chinese contractors but also for the many citizens who are associated with those Chinese. It is therefore our sincere hope that the appointment of these Irish consultants at BPC marks the end of era in which the utility was a ‘feeding pot’ for these business associates.
It is our hope that at the end of the agreed period, which is three years from now, the Management Contract service provider, will deliver a transformed BPC in line with the agreed performance indicators.
A suitably skilled project officer (preferably a local) with a thorough knowledge of the project requirements should be appointed and be responsible for monitoring and evaluating these Irish consultant’s performance.
Perhaps it is also worth noting that the subjection of the national power utility to management contract does not bring with all answers to questions that one could be having. The first question is what is going to happen to the current management of the BPC? Who is going to supervise who, under which circumstances?
Last week Sebetlela was quoted by the local media to have said that the Management Contract service provider shall take over the operations of Botswana Power Corporation for a three year period to facilitate this highly anticipated transformation.
Although it is quite clear that the Irish company will be occupying the driver’s seat, atleast for the next three years, what is not clear though is the role that the current BPC executive would be playing during this tenure. It also not clear how much the BPC will be paying for this vital consultancy.
We argue the BPC board to lift that veil of secrecy by releasing the cost of this consultancy to the tax payers. We believe that both the media and the public should be able to get detailed spending information out of government, with minimal hassle, without being asked why they want it and what it’s for.
Actually the most interesting thing to find out is why is the executive management of the BPC still the same? Is this an indication that the board is happy with its delivery over the past three or years? Or maybe it’s a simple concept of covering each other’s back?
But as previously said in this space, accountability, it would seem, has now become a thing of the past in our country, if it ever existed. Whatever the case it is, the BPC board should not forget that on behalf of the shareholder, it is supposed to provide strategic direction to the corporation. This entails even showing some people the door if the need be.
Why is it that in such a stark of failure we do not hear that anybody has paid with their job as a result? If Sebetlela and his board of directors have no better strategy to use perhaps they should consider a Christian approach to fire defaulters at that ailing corporation.
I recently read elsewhere that prior to 1985, the popular American hotel chain, Days Inns was initially a Christian company. Its founder, Lon Day cared immensely about his employees and even hired four full-time workplace chaplains to counsel workers who were in need.
At the same time, workplace realities occasionally dictated that problematic employees be terminated, especially for taking kickbacks or for harassing female co-workers. But as expected dismissed employees would typically plead their case with a fervent: “You can’t fire me. I thought this was a Christian company!”
Some shareholders, like Day and most importantly the board of BPC, seem to have little difficulty letting employees go, particularly those ranked highly. The sad reality though is, the prospects of terminating contracts of these employees can turn even a seasoned business professional into a nail-biting novice. So go ahead Mr Sebetlela and tell those defaulters that they cannot have ‘second chance’ hundreds time.
The Bottom-line is that the energy sector remains strategic and pivotal in unleashing our country’s economic and social potential for advancement for all the citizenry and as such the BPC should never be put on auto pilot like it has been the case for quite some time now.