Wesbank

Govt to sell Morupule A

SHARE   |   Monday, 30 May 2016   |   By Staff Writer
Abi[L] with Minister of Minerals, Energy & Water Resources Kitso Mokaila Abi[L] with Minister of Minerals, Energy & Water Resources Kitso Mokaila

Government  is considering selling the multimillion pula Morupule A power plant to private investors immediately after refurbishment, Permanent Secretary in the energy ministry has revealed. Appearing before the Public Accounts Committee (PAC), The Permanent Secretary in the Ministry of Minerals, Energy & Water Resources Kgomotso Abi said in an effort to cut down on costs  of running the plant and other risks, his ministry may decide to sell Morupule A to a private company and there after purchase power from it to supplement the national power grid. According to Abi Morupule A is being refurbished at a cost of USD 204 million and the contract has been awarded to a top South Korean power equipment maker, Doosan Heavy Industries and Construction. The power plant,  which was  shut down in 2012, has a total capacity of 132 megawatts comprising four generators producing 33 megawatts. Performance in power production at the plant progressively dropped from over 84 per cent in 2008 to below 30 per cent in 2012, forcing the suspension of operations. The contract requires Doosan Heavy Industries to replace and repair key parts, such as turbines and boilers in the Morupule A power plant over the next two years to improve performance.

Government and Botswana Power Corporation (BPC) have conducted studies which indicated that the station can be brought back to design level capacity through refurbishment of boilers, turbines, generators and other equipment. Once refurbished, Morupule A could run for another 15 years at 80 percent plant availability. Although PAC committee members expressed concern that the refurbishment seems to be a bit costly and questioned why government didn’t instead consider constructing a new power station, Abi assured them that a new power station would have been even more expensive considering the fact that, it was  going to require that they  demolish the old structure first. Meanwhile Abi also told the PAC that the national power supplier BPC is currently in trouble, grappling under severe financial distress. Among the contributory factors to the financial situation is said to be the low tariffs that BPC is currently charging to customers.  He suggested that it is now time for government to move to more cost effective interventions. This, he said could be made easier by the introduction of a power regulator. “A regulator would look out for the interests of both the BPC and the customers,” said Abi.