Monday, September 21, 2020

‘Government has no plans to reduce tariffs’ – WUC Report

Government is not about to consider any drastic alteration to the existing water and electricity tariffs for both commercial and domestic consumers. That is despite the fact that there is concern that it is not possible to attract foreign direct investment into the country as a result of the prohibitively high tariff rates.

Fears have been raised that the current problem of power supply and demand mismatch, which has resulted from South Africa’s Eskom’s decision to limit Botswana’s portion of their energy has the potential to impact on the availability of water.

This emerged at the official presentation of the Water Utilities Corporation Annual Report 2007/2008 to the Minister of Minerals, Energy and Water Resources, Ponatshego Kedikilwe, by Abednigo Humanly, who is the Corporation’s Director of Commercial Services at Ministry Headquarters recently.

According to the report, there are indications of serious challenges that lie ahead, which the WUC will be faced with in their endeavors to make water as widely accessible as possible to the broader section of the population.

Given the important role played by electricity in the generation, treatment and distribution of water to the point of use, it is apparent that the recurrent shortage of power supply in the SADC region as a result of outstripping supply and the rising cost of fuel are seen as major factors that would loom large in any explanation of failure to bend the current rates.

There is also concern that the shortage of materials and critical skills, with the advent of the 2010 FIFA World Cup in South Africa, which is bound to consume a lot of resources, might pose a serious challenge to the country’s capacities.

It is also pointed out by the report that the possibility of expansion into some major villages means a further constraint to the available power voltages. It follows from this that the existing costs for the already connected consumers are bound to be upset since the available volumes of water have to be shared whilst alternative supplies remain to be explored.

To highlight the extent of difficulties the country is grappling with, water levels at the Molatedi Dam in South Africa, which constitutes an equally vital source of Botswana’s water supply, went down by 6% at the beginning of the review period.

The effect of this was that the corporation could only get 50% of its entitled ration or 3.65MCM per annum for the most part of the period under review. The provision of the agreement signed between the two countries is that whenever the Dam levels get below 26% the WUC is then eligible for only 50% of its seasonal allocation.

Responding to the alarm raised by the report, Minister Kedikilwe says that as much as it carries valid concerns, the public should be helped to appreciate that efforts are being made to ameliorate the situation.

However, in spite of this seemingly gloomy state of affairs and the ever- present possibility of an uncertain water supply situation, it would appear that not all is lost. There is cause for hope.

Plans are underway to develop infrastructure to meet the rapid growth of water supply areas and the ever rising demand for water nationally.

Against this background the construction of the Francistown Water Master Plan Project was completed during the reporting period, while the Selebi Phikwe Water Master Plan is ongoing. It is further reported that in a bid to spread the supply network as widely as possible, preliminary works on master plans for Lobatse, Jwaneng and Sowa Township Authority have reached an advanced stage following the completion of the relevant terms of reference.

In this context, the Minister cited the ongoing Mmamabula Coal Power Project which is expected to generate sufficient electricity for the region. Additionally, it is partly in view of the pressing need for such a facility and efforts at preventing the possible consequences of total blackout that the Governments of Botswana and the Republic of South Africa and other stakeholders have decided to reconfigure the project so that it can deliver by 2013.

Concerning the tariffs, Kedikilwe stated that his Ministry has a duty to manage the corporations; both WUC and the Botswana Power Corporation in a manner that they can ultimately become self sustaining. For this reason he pointed out that cost recovery forms an indispensable alternative.

“It should be noted that the worldwide upsurge in prices, and the fact that we purchase items on parity basis necessarily impacts on the cost of our inputs and obviously the tariffs,” he said.

RELATED STORIES

Read this week's paper

Sunday Standard September 20 – 26

Digital copy of Sunday Standard issue of September 20 - 26, 2020.