Morupule B weighs down on economy
Mbongeni Mguni | Tuesday February 4, 2014 16:03
Last year BPC finances took up the lion’s share of both the initial and supplementary budgets and will this year gobble up to 16% of the development budget despite the negative growth resulting from cost of inputs exceeding the value of sales.
Presenting the budget estimates for the 2014/15 financial year in Gaborone yesterday, Finance Minister Kenneth Matambo said that P1.5 billion of the planned allocation will be directed towards operation and maintenance of the Morupule B plant, while P140 million will cater for emergency power supplies.
“Whereas the development of Morupule B Power Station was expected to transform the country from being a net energy importer to near self-sufficiency, continued technical problems have created uncertainty over the availability of power supply in the short to medium term,” Matambo told parliamentarians. “While the effects of the shortage of power supply on the economy have not been assessed in a systematic way, it is expected that it has had a negative impact on growth. In addition, it has slowed down the government’s village electrification programme.” The station’s four units were supposed to be generating 600MW by October 2012, but adverse weather, followed by a series of technical failures, delayed finalisation of the fast-tracked plant.
At present, only two units are operational forcing BPC to seek emergency power from Eskom as well as from the country’s two diesel-fuelled power peaking plants.
Industry experts estimate that diesel powered turbines such as at the 90MW Orapa power station can consume up to 140,000 litres of fuel in a day.
Diesel retail prices are currently hovering around P9 per litre.
The planned P2.05 bailout to the BPC for its operations and maintenance this year, adds onto P1.49 billion the corporation received via a presidential directive last year to cover Eskom imports, obligations of the Morupule B loan, Morupule Coal Mine bill and operation and maintenance for the Morupule B project.
In the 2012/13 the BPC received P540 million towards its Eskom bills and P330 million for its Morupule Coal Mine obligations, while in the 2011/12 financial year, the corporation received P454 million in cash injections.
On the back of the huge BPC allocation, the Ministry of Minerals, Energy and Water Resources received the largest share of the P12.24 billion development budget for the year, in which allocation priorities include maintenance and efficient operation of existing infrastructure, completion of ongoing projects, and funding of social welfare programmes.
Apart from BPC, the North-South Water Carrier II from Dikgatlhong Dam to Palapye, as well as from Palapye to Gaborone was allocated P600 million, with completion of Dikgatlhong and Thune Dams at P200 million and P100 million, respectively.
The Ministry of Transport and Communications at P1.875 billion or 15.3% of the development budget has the second largest share. The major projects under this ministry include the Tonota-Francistown Road project at P150 million, Kazungula Bridge at P100 million, cash injection to Air Botswana amounting to P330 million.
The third largest development budget allocation of P1.271 billion or 10.4% goes to the Ministry of Local Government and Rural Development. Among the major programmes under this ministry include Ipelegeng at P580.59 million.
Proposed Ministerial recurrent budget for financial year 2014/2015 is P33.32 billion, which represents an increase of P2.79 billion or 9.1 On the recurrent budget, over 70 percent was allocated to four ministries of education and skills development, health, local government and rural development and defence, justice and security.
On the other hand, the projected total revenue and grants for 2014/15 amount to P50.18 billion leading to a proposed overall budget surplus of P1.33 billion, or 0.97 percent of forecast 2014/15 GDP.
Despite the heavy losses that have been recorded in the water and electricity sectors, Matambo said it will continue to be necessary for government to invest in them, mainly to secure supply because these are essential inputs to other economic sectors.