One of Botswana’s longest ailing parastatals, Botswana Power Corporation (BPC) has shown a significant financial turnaround in a space of just 12 months.
This was revealed this week at a media engagement on the Masa 2020 transformation strategy update in Gaborone.
Giving a progress update on the transformation strategy, BPC Chief Executive Officer 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 in January this year in what he called a momentous improvement.
Morupule B Remediation
Schwarzfischer said work was ongoing, with 3 units currently running. Unit 4, he added, is on planned annual statutory outage and will be back in operation by April 2018. The overall maintenance on Unit 4 expected to reduce the power import to 4%.
Schwarzfischer said that Morupule-A experienced delays due to implementation of modification and the plant will be fully operational in July 2018. Import contracts were also renegotiated.
“If we buy power now it is much cheaper, and in former times we had to buy power in advance which we sometimes didn’t use and still need to pay. This caused a huge burden for us,’’ pointed out.
Overhead costs of the previous financial period were also reduced, causing an impact of 28%. BPC aims to reduce tariff subsidy to zero within a timeframe of 4 years in order to avoid relying on government in the future.
BPC received tariff subsidy of P2.1 Billion two years ago and in the previous obtained P1.4 Billion. The corporation expects to receive P800 million in 2019. According to Schwarzfischer, tariffs will be reduced to P400 million, then zero.
Resolving Strategic Challenges
On resolving impediments to their business strategy, Schwarzfischer said that they concluded phase 1 of business unit restructuring and implemented EXCO structure with new members appointed. He also said that they released 368 staff members on voluntary basis and that between 70 and 80 percent of them were over hanging capacities.
Phase 2 of the restructuring has already commenced and it is expected that BPC will increase efficiency over the next four years. Efficiency, Schwarzfischer said, will be gained by reengineering processes and placing the best candidates into the new organization. He also said recruitment was ongoing along with desktop placement of staff as per the new structure, an exercise which will be completed in September 2018.
He also explained that BPC is currently reengineering the process to shorten the connection time to customers.
Distribution faults are said to have been reduced by 11% and response time to faults was reduced by 36% in the last 12 months. Faults reported were reduced from 56 000 to 50 000.
There are other projects undertaken to address network performance of which 9 were undertaken to refurbish transformers. The project is estimated to cost of P25 million.
“Other projects that are undertaken are upgrading of lines that will cost an estimated amount of P20 million, refurbishment of switchgears and cables estimated to cost P30 million and P20 million respectively,’’ stated Schwarzfischer.
Schwarzfischer said that customer connection backlog was reduced by 50%.
Schwarzfischer said that the BPC has embarked on a comprehensive renewable power development strategy in which they will develop and operate a 100 megawatts solar power plant. A mini hybrid power plant in 20 isolated villages will be constructed. He, however, stated that the BPC requires grants to install power storage containers across the country to store power during the day and dispatch it at night.
Rural electrification is said to have improved as 80.6% of villages across the country have been electrified. 399 villages are electrified while 92 unelectrified and 4 new villages undergoing electrification.