Botswana Power Corporation (BPC); another one of Botswana’s longest ailing parastatals, has made a huge financial turnaround in twelve short months!
This came to light this week at a media briefing on the Masa 2020 Transformation Strategy update held in Gaborone. Giving a progress update on the Transformation Strategy, BPC CEO, Dr Stefan Schwarzfischer said the corporation made an operational loss of P1.2 billion in January 2016. The loss was, however, reduced to P200 million this January, in what he termed a momentous improvement.
Morupule B remediation
Schwarzfischer said work is ongoing, with three units currently running. Unit 4, he added, is on planned annual statutory outage and will be back in operation in April. The overall maintenance on Unit 4 is expected to reduce Botswana’s power import to 4%. He said Morupule A experienced delays due to the implementation of modifications and that the plant would be fully operational from July. Import contracts have also been renegotiated.
“If we buy power now, it’s much cheaper and in former times we had to buy power in advance which we sometimes didn’t use and still need to pay for. This caused a huge burden for us,” he pointed out.
Overheads costs on the previous financial period also fell, causing a 28% impact. BPC aims to reduce tariff subsidy to zero within 4 years to avoid future over reliance on the government. Two years ago, the corporation received a tariff subsidy of P2.2 billion and P1.4 billion last year. BPC expects to receive P800 million next year. According to Schwarzfischer, tariffs will be reduced to P400 million and ultimately to zero.
Resolving strategic challenges
On resolving impediments to their business strategy, Schwarzfischer said that they concluded Phase 1 of the business unit restructuring and implemented the EXCO structure with new members appointed. Additionally, he said they released 368 staff members on a voluntary basis and that between 70-80% of them were overhanging capacities.
Phase 2 has already commenced and it’s expected that BPC will improve efficiency over the next four years. Schwarzfischer explained that efficiency would be gained by re-engineering processes and recruiting the best candidates. He also said recruitment is ongoing along with desktop placement of staff as per the new structure, an exercise that’s expected to conclude this September.
He also highlighted that the BPC is currently re-engineering the process to shorten the connection times for customers. Distribution faults are said to have fallen by 11% and response time to faults reduced by 36% in the last 12 months, with faults reported to have fallen from 56 000 to 50 000. There are other projects being undertaken to address network performance, nine of which were undertaken to refurbish transformers. The project is expected to cost P25 million.
“Other projects that are undertaken are the upgrading of lines that will cost an estimated P30 million , the refurbishment of switchgears and cables at an estimated cost of P30 million and P20 million respectively,” he said.
He said the customer connection backlog has been slashed by 50%.
Schwarzfischer said that the BPC has embarked on a comprehensive renewable power development strategy through which it will develop and operate a 100 megawatts solar power plant. A mini hybrid power plant in 20 remote villages will be constructed. However, he said that the BPC requires grants to install power storage containers across the country to store power during the day and dispatch it at night.
Reportedly improved as 80.6% villages have been electrified. 399 villages have been electrified, while 92 without electricity and four new villages are in the process of being hooked up.
What I’m itching to know is whether Schwarzfischer happens to possess any other hidden skills in the running of ailing airlines? He probably doesn’t but I bet he could whip one into shape in record time. In the time this man’s been in charge at the BPC, one thing I know for sure is that power cuts have dropped significantly. He’s clearly doing something right. Now, if only we could do the same for other parastatals which continue to bleed the government dry and seem to simply be plodding along from year to year! We can only hope and pray!
Source: The Botswana Gazette