Thursday, April 9, 2020

“PEEPA fulfilling its mandate”

The Public Enterprises Evaluation and Privatisation Agency (PEEPA) said on Thursday, it regretted the delay in launching a programme to privatize the National Development Bank (NDB) and called on all stakeholders to rise above their differences
“There might be differences among officials on some aspects of privatisation and how to achieve results. However, one would hope that all stakeholders would rise above any such differences in the interest of the people of Botswana,” said PEEPA CEO, Joshua Galeforolwe.

“I do not believe that any differences of opinions should hold Government’s privatisation programme to ransom,” he said.

Explaining events leading to the cancellation of the stakeholders’ workshop which was scheduled to be held on October 4th, Galeforolwe said all role players had been consulted well in advance. It has been agreed with the Minister of Finance and Development Planning, the Honourable B Gaolathe, and the National Development Bank (NDB) management that such a workshop was essential to kick-start the development of a strategy to privatize NDB, pursuant to Government’s decision.
He said: “At the behest of Ministry of Finance and Development Planning, PEEPA was asked to develop a privatisation strategy for the NDB. To do so, PEEPA was also asked by the Honourable Minister to consult with all stakeholders as provided for in the Privatisation Policy.”

In June, PEEPA met with the NDB management to discuss the Government’s decision to privatise the bank, examine the procedures to be followed and role of different stakeholders. At that meeting, an agreement was reached on the need for a stakeholders’ workshop aimed at securing the understanding and support for the project and also agree on roles and responsibilities of stakeholders on this process. On September 10th, NDB and PEEPA agreed to hold the workshop on the October 4th, giving all parties 24 days to make themselves available.

He said, “However; it must be emphasized that as way back as September 3rd, some Finance Ministry officials questioned the usefulness of the workshop as in their view the objectives for privatizing public enterprises had been spelt out in the Privatisation Policy.

“Notwithstanding, the Minister, at a meeting held on September 26th, accepted the need for the shareholder to attend that workshop and designated his Assistant Minister to attend on his behalf.

We thought that those who did not see the need for the workshop misunderstood what it was intended to achieve. The workshop was merely going to be a forum to discuss the Government’s objectives in privatizing the bank, explore the procedures to be followed and the roles to be played by different stakeholders so that when the strategy development work commences, everything should run smoothly and expeditiously.”

Galeforolwe said before the September 26th meeting with the Honourable Minister, the Assistant Minister and Chairman of PEEPA board, the NDB had already written to the Privatisation Agency and said they did not think it was advisable to invite the union to the workshop. They stressed it was “inappropriate for both the board (NDB) and the union to be addressed together on this sensitive issue.” However, PEEPA reminded the NDB that the unions had already been invited and it would not be appropriate to rescind the invitation at that stage, as the workshop was to agree the process to be followed and the roles of the various parties and not discuss the strategy since it has not been developed.

“We find it regrettable that the main stakeholders, NDB and the Ministry, only advised of their non-attendance on the day of the workshop. However, it is our belief that, in view of the (need for the strategy and the agreement that had been reached about the need for the workshop) agreement by both parties as regards the privatisation of the NDB and the recognition of the need to progress the transaction earnestly, the workshop will be rescheduled to a future date convenient to all parties,” he said.

“Contrary to what was reported, the Bank of Botswana officials did not walk out of the workshop. They dispersed together with other representatives who had attended the workshop,” he added.

On whether PEEPA has failed to carry out its mandate, Galeforolwe had this to say, “At the outset, one must understand what PEEPA’s role is. In terms of the Privatisation Policy and Paragraph 187 of the Privatisation Masterplan, PEEPA is responsible for advising Government on all aspects of privatisation, commercialization, assisting with the selection of parastatal board members and monitoring the performance of stateÔÇôowned enterprises. It also prepares privatisation strategies and plans for implementation.”

The Privatisation Masterplan clearly states that the actual implementation of privatisation transactions shall be carried out by the line ministries and not PEEPA. The document further indicates that “Cabinet is the ultimate decision making body for the privatisation and will approve the outcome of the privatisation bidding process prior to closing of the transaction.

It is entirely the prerogative of Cabinet to agree or disagree with any recommendations made as it was the case with the privatisation of Air Botswana. In that particular transaction, we facilitated the tender process and the negotiation with private sector interest on the basis of a delegated mandate from the Minister of Works and Transport.”

He added that “because the decision making authority to implement lies elsewhere, it must be appreciated that the pace of implementation of transactions does not lie wholly with PEEPA. As regards carrying out PEEPA’s mandate, I can confirm that we have prepared the Privatisation Masterplan which has been approved by Government.”

Some of our successful projects include facilitating private sector investment in providing office accommodation for the Ombudsman, facilitation of outsourcing of catering services for the Botswana Police College and catering for two other institutions, outsourcing of security services, grounds maintenance and landscaping, amongst others.

In pursuance of our mandate, we have developed procedures and systems for implementing divestiture transactions. We developed procedures and guidelines for outsourcing or contracting out public services and guidelines for implementing public private partnerships. We have trained client ministry staff in the use of these systems and guidelines. We have assisted in the preparation of feasibility studies and the preparation of tender documents to source private sector service providers. We have overseen implementation by client ministries of some successful PPP and outsourcing transactions.

“The process of privatisation is lengthy because it includes, among other things, tendering for the procurement of transaction advisers, undertaking due diligence, competitive bidding for a private sector service provider and many other processes some of which are prescribed by the public procurement legislation. It involves many different arms of Government who have to come on board and move together at the same pace.

The planned privatisation of the Botswana Telecommunications Corporation (BTC) is still underway. However, we experienced delays in commissioning a transaction advisory team.
PEEPA has and continue to fulfill its mandate, to advise and facilitate in the privatisation process.
“We cannot be held accountable for any delays in implementation, unless we had the implementation role supported by legislation,” Galeforolwe said.

*Joshua Galeforolwe is CEO of Public Enterprises Evaluation and Privatisation Agency (PEEPA). The above is an unedited version from Mr Galeforolwe.

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