Botswana sells power station

By Mpho Tebele

GABORONE- BOTSWANA has decided to sell its newly built P11 billion (US$972.2 million) power plant, Morupule B.

The power plant has been plagued by technical faults, leading to power cuts and rolling blackouts across the country.

While Botswana Power Corporation (BPC) does not want to disclose the name of the buyer, reports indicate that the troubled power station has been sold to the same company that was commissioned to construct it – the state-owned China National Electric Equipment (CNEEC).

In a statement, BPC said that over the past few months the BPC Board of Directors together with the shareholder have been looking at options of ensuring security of supply and making the Corporation financially viable again.

Morupule B, the country’s major power station, has broken down several times due to boiler leaks and generator failures, leaving the country entirely dependent on power imports from South Africa’s already strained grid.

BPC has been running at a loss for the past since 2009 and given the pressure and competing priorities on government in the medium to long term, 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,” the BPC statement said.

It says Morupule B has proven to be costly to maintain and operate due to construction and equipment defects and the decision to sell the power plant will go a long way in remedying this situation.

Botswana Power Corporation Workers Union (BPCWN) Secretary General Bahithetswe Lentswe said that they held a meeting with the BCP management on the imminent sale of Morupule B power station.

He said the management informed them that the decision to sell the power plant was taken by Cabinet.

CNEEC was commissioned to start construction of the power plant in February 2010. It was due for completion on October 15, 2012, but was eventually handed over to the Botswana government on May 4, 2014, with a subsequent root cause analysis report fingering the Chinese for poor workmanship and quality of equipment.

The analysis report also blamed poor design of the plant as well as unavoidable factors, which included weather conditions and the time taken to import some parts.

The delays in the station’s completion and its subsequent troubles have cost taxpayers billions of Pula in emergency diesel power generation as well as costly imports of power.

By 2014, the power station is reported to have already accumulated cost overruns in excess of US$1.66 billion (P17 billion) and there are even claims that the figure could be much higher.

Former Minister of Minerals and Energy, Kitso Mokaila, told journalists that the breakdowns had resulted in the Botswana government spending a lot of money on importing power rather than getting power from the contract with CNEEC.

Recently, South Africa power utility Eskom confirmed that it had increased supplies to Botswana under an agreement to export 100MW and 300MW of power. Another power station Morupule A is being refurbished and is expected to be completed by 2018.

Initially, the Botswana government had threatened to take legal action against CNEEC over the consequential loss as a result of frequent breakdowns of the facility and failure to handover the plant on the agreed time.

November 2016
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