Thursday, May 23, 2024

The return of Fengyue Glass Project

The ill-fated glass project which cost government billions before going bust might be making a return as government mulls over bring the project back to life.

According to the Economic Recovery and Transformation Plan (ERTP) released this week, part of navigating the post Covid19 world and establishing a new economic order might result in the Fengyue glass manufacturing plant being revisited to determine whether there is a potentially viable venture that could be resuscitated.

The proposal to revisit the glass manufacturing plant will stun many given how the project dismally failed after the government’s investment arm Botswana Development Corporation spent more than P500 million in the venture. Conceived in 2007, the construction of the 410-tonne float plant in 2010 in Palapye and four years later it went bust.

After the national scandal on how over a billion pula was squandered on the failed project, another shocker followed when it was revealed that the glass plant was liquidated and sold to BDC for a measly P48 million. BDC attributed the failure of the project to time and budget overruns which made the project unviable.

Though there have been insinuations of corruption over the glass manufacturing venture, no one has been charged or held responsible over the disastrous failure.

Now with the country scrambling to fix the economy, the government economic advisors – comprising of Finance and Economic Development ministry, Bank of Botswana, Investment, Trade and Industry ministry, Botswana Institute for Development Policy Analysis (BIDPA) University of Botswana – have suggested that diamond dependent economy has transformed to private sector led, with the country focusing on exports due to its narrow economic base.

The officials suggest that  BDC in cooperation with the private sector need to promote large scale firms to serve both the local and export markets. Apart  from revisiting the glass plant, other identified projects include the leather park and MilkAfric Dairy projects in Lobatse.

The advisors in the draft economic recovery and transformation plan say BDC and Special Economic Zones Authority (SEZA) will have to evaluate the status of the quick-win projects and the required financial requirements to aid assessment of feasibility of speedy implementation.

“Many of the proposed projects in manufacturing and agriculture are in areas covered by the SEZ initiative. The implementation of SEZ’s is being done according to a timetable and sequencing determined by both the capacity of the SEZA to implement and the availability of funding,” read some parts of the ERTP document.

“The SEZ timeline should be reconsidered to determine whether it is feasible to speed up the development of agricultural projects, manufacturing (including leather), and finance and business services, which are the SEZ focus areas.”

The economic advisors highlighted that projects have a direct impact on economic activity as a result of the injection of fiscal expenditure, as well as longer-term benefits and a multiplier effect. They added that government should prioritise project spending on the basis of anticipated socioeconomic returns, warning project spending can also be wasteful and achieve limited impact relative to the money spent.

“Hence project spending, even in an environment of urgency where economic support is urgently needed, has to be evaluated in terms of the projected impact relative to costs (the benefit-cost ratio), or preferably a full feasibility study, to determine whether the spending is worthwhile,” they said.

The ERTP has also reiterated the government’s plans to establish a project management unit which will handle the management of large projects on behalf of ministries, admitting that project implementation has been a perennial problem in Botswana, with delays and cost-overruns and escalation.

“This problem may be addressed through the rationalisation of implementation structures (including those in ministries, NSO and GICO) into a well-resourced major projects unit with specialised skills to manage and implement large projects, regardless of the sector of the project.


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