- Internal squabbles aff ects BERA performance
- Petroleum industry feels the effects
The instabilities caused by internal squabbles at the Botswana Energy Regulatory Authority (BERA) are a cause for concern and could negatively affect the energy sector regulations, says Engen Botswana Limited Chairman, Shabani Ndzinge.
Ndzinge’s concerns were raised in the company’s 2019 Annual report, released a few days ago. Engen, the only petroleum Services Company listed on Botswana Stock Exchange (BSE), is one of the largest fuel companies in Botswana.
In his words, Ndzinge said the instability at BERA was a cause for concern as this resulted in the authority being inwardly focused and being distracted from performing their core mandate of providing economic regulation to the energy sector.
BERA is responsible for providing an efficient energy regulatory framework for Electricity, Gas, Coal, Petroleum products, Solar and all forms of renewable energy. It was established by the Botswana Energy Regulatory Act 2016 and started its operations on the 1st September, 2017. Ndzinge feels BERA has recently been distracted to perform its mandate.
It has been in the news for the wrong reasons.
The Chief Executive Officer (CEO) Rose Seretse and Chief Operating Officer (COO) Duncan Morotsi were alleged to have deliberately mismanaged millions of Pula, according to a report compiled by the BERA board of directors.
The two most senior executives at BERA, Seretse and Morotsi were also alleged by their own board of directors to have personally handled the questionable refurbishment of Lobatse Office Plot 8842, Lobatse Town Centre as well as its controversial procurement process which led to BERA spending an extra P6.3 million despite having initially budgeted just P5.9 million.
Further, Seretse and Morotsi were accused by their own board in a report seen by The Botswana Gazette of using BERA funds to acquire luxurious motor vehicles for their personal use. However, Morotsi has come out to openly refute such as incorrect. When the BERA Finance team questioned such decisions, it they were allegedly dismissed, but they won the matter at court. Industrial Court Judge, Justice Bahuma, said in the judgement that BERA boss used public funds at the Authority to fight her personal vindictive battles, totally non-beneficial to the Authority as an organisation.
ENGEN’s PERFOMANCE DESPITE INDUSTRY CHALLENGES
While the BERA internal troubles are sasid to have distracted them from performing their dutries as mandated by government, the Engen managing Director Chimweta Monga, said Engen performed well against all odds.
He said the retail market continued to be the cornerstone of the Engen Botswana Ltd business, contributing around 70 percent of total portfolio revenues compared to approximately 30 percent of revenues contributed by the commercial market.
During the period under review, Engen made P2.9 billion in revenue, an increase from the P2.5 billion made during the previous reporting period.
Further, Monga said 2019 saw a 9 percent increase in retail volume generated from our existing network on the back of enhanced operational efficiencies derived from dealer realignment, improved inventory holding and productive promotional activity.
“The retail channel also had significant growth in its nonfuel revenue generating activities, with Convenience income recording an overall growth of 10 percent compared to the prior year, with Quick Shops and Fast Food and Alternate Profitability Opportunities (APOs) all showing some level of growth,” he revealed.
He further added that Quick Shop income in 2019 increased by 14 percent over 2018, in part due to Coca-Cola beverages being able to stabilise their stock availability to consistently supply Engen Quick Shops. Disruption in the supply of small pack water was also alleviated by Engen through the signing up of a new local supplier, and this contributed to increased Quick Shop revenue during the last quarter.
Monga said these developments were significant as Coca-Cola beverages and small pack water products are key revenue generating products in convenience outlets.
Further, the Engen boss said the period under review saw an increase in the level of partnerships between energy companies and food franchises in order to provide this offering at retail outlets.
“Alternate Profitability Opportunity (APO) income performed well compared to prior year, achieving overall growth of 6 percent. New agreements with banks for installation of ATMs at various Engen service stations have been initiated and will start billing in the 2020 1st quarter,” he stated.
During the year, Engen Botswana Ltd increased the number of its convenience outlets and is looking at increasing retail initiatives in 2020 to continue to grow the nonfuel revenue stream. While no new service stations streamed in 2019, two will stream in early 2020, and despite considerable competitor activity in this channel, the Company said it managed to maintain its robust market position.
Engen made P129 million as profit for the period. Dividends amounting to P81 million were paid during the year, which is almost double of the P45.8 million paid in 2018.