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Why Morupule B was doomed from the start

MBONGENI MGUNI
Morupule B, riddled with faults, is up for sale
A damning report by the World Bank this week suggests there was little chance of success for Morupule B, the troubled multi-billion pula power station that triggered loadshedding, business losses and even diplomatic tensions. Staff Writer, MBONGENI MGUNI reports

Right from the start, according to the World Bank’s latest assessment, Morupule B got off on the wrong technical footing.  On that Friday in February 2010, as scores of dignitaries, the media and others gathered for the power station’s groundbreaking ceremony, there was no clue of the disaster that lay ahead.

On that day, then energy minister, Ponatshego Kedikilwe, appealed for the power station’s delivery on time and within budget and China National Electrical Engineering Company (CNEEC) officials pledged to hand over a shiny, new operational facility in cost and time.

The World Bank pumped $136 million into the Morupule B project and its associated developments.  Other funding came from the Industrial and Commercial Bank of China/Standard Chartered initiative, the African Development Bank and the Government of Botswana.

 

The birth of technical glitches

The World Bank now says CNEEC should never have qualified to be given the project. Initially mired in allegations of corruption, the tender was cleared after a Directorate on Corruption and Economic Crime probe but the World Bank says the troubles lay far deeper.

The assessment that eventually resulted in CNEEC winning the $971 million tender to build the power plant, was riddled with faults, starting with inexplicable changes in the type of plant required between the Prequalification document and Request for Proposals.

The Prequalification document wanted bidders for a plant using pulverised coal boilers, which the Botswana Power Corporation (BPC) had plenty of experience with at Morupule A.

However, the Request for Proposals, the last step before tender awards, asked bidders for Circulating Fluidised Bed (CFB) boiler design, which BPC and CNEEC were inexperienced with.

“This discrepancy regarding the technology of the plant, created a major risk in the selection of the contractor, as the firms prequalified for one technology, were invited to bid for another,” the World Bank notes.

To address the anomaly, the BPC allowed bidders to earn points for the experience their subcontractors had in designing boilers with CFB technology. Points were also earned for the support the subcontractor would provide in engineering, manufacturing and quality of the boilers.

“The assessment did not establish that the contractor itself had such proven experience with CFB technology,” the World Bank notes.

“Given the central role of the contractor in delivering the overall, the lack of contractor’s experience with CFB technology created too high a risk for the project, the experience of the subcontractor for basic design of boilers notwithstanding.”

Soon after CNEEC was awarded the tender, its inexperience with CFB technology came shining through, as the Chinese firm was unable to provide superior management and supervision.

CNEEC also had only one completed plant and six others described as ‘in progress’.  However, there was no indication whether these used CFB technology or whether the Chinese firm had prior experience in building with the technology.

The result was frequent and costly faults and bursts of the boilers, which the World Bank believes were responsible for nearly all the outages at Morupule B over the years. By comparison, the turbines

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and generator sets, the Bank says, have performed satisfactorily.

In its 2015-2016 Annual Report, the BPC attributes Morupule B’s low output to ‘a number of failures’ on the boilers and estimates $176 million will be required for repairs.

 

Inadequate staffing

The World Bank’s assessments points out that the BPC heavily underestimated the numbers of supervisors and officials it need to manage the project throughout design, manufacturing and delivery.

Even with its project management team and owner’s engineer, the BPC still did not put enough boots on the ground at Morupule B, where at one point 3,000 workers were involved in various activities of the fast-tracked project.

“The level of staffing was far below what the project required and the team did not have all the required competencies. The team became overwhelmed with the problems, especially after commissioning of the units and the ensuing construction-related operating problems.

“BPC proved unable to strengthen the team adequately in spite of a number of attempts to do so.

“Overall, BPC was not effective in its main task,  which was ensuring that a new, well-operating 600MW power plant came on stream in time to replace imported electricity before end-2012 as originally envisaged,” the World Bank notes.

 

Body count rises

Between the poor supervision and break-neck speed at which the contractor attempted to complete the power station, a total of five fatalities were recorded during the power station’s construction. CNEEC had been given the task of building a 600MW power station within 41.5 months, which would had it been achieved been among the record books. Even when another 40 days were added to this timeframe, the time required was still short for a greenfield power station.

According to World Bank data, three fatal accidents occurred over a period of about 19 months: in February 2011, August 2011, and September 2012. Subsequently, there were two more fatal accidents, in December 2013 and in March 2015.

“All the accidents, except the one in December 2013, were related to falls from height,” the Bank notes.

The BPC was poor in enforcing its safety standards at Morupule, even though an action plan was agreed after the first fatality and strengthened after the second.

“It was only after the third accident in September 2012 that BPC took more decisive actions, including a temporary suspension of work at height, strengthening site security, and hiring a safety supervision firm and a separate scaffolding contractor,” the World Bank notes.

 

Rated ‘U’

The 58-member World Bank team responsible for monitoring the Morupule B project, rates the performance of the BPC and government in the execution of the project and decisions around the contractor as ‘unsatisfactory’.

“Overall borrower performance is rated unsatisfactory, combining both the government and BPC performance ratings. The rating gives a preponderant weight to the weaknesses and omissions exhibited during the early stages of the project such as selection of the contractor, staffing of the project team, early supervision effort, as these factors have had a decisive impact on the project’s currently unsatisfactory outcome.”



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