BPC seeks P2billion govt support
Goitsemodimo Kaelo | Friday September 16, 2016 15:42
The cash injection is expected to mitigate the corporation’s financial situation for the financial year 2016/17.
The corporation’s chief financial officer, Rebecca Mgadla told the Parliamentary Committee on Statutory Bodies chaired by Samson Moyo Guma that they have proposed to be given P2 billion by government. She said that the figure is still under consideration.
BPC has already in February been given a government financial injecting of close to P2.5 billion. The proposed additional funding is expected to be announced later this year by a way of supplementary budget.
In December 2015, the cash-strapped utility benefited from the supplementary budget of P821.4 million, an addition to a P1.5 billion issued in February the same year which were meant to cover tariff subsidy and operational costs.
Mgadla said the company’s failure to collect money owed to it by government has affected their balance sheet. She reported that as at July 2016, government’s debt to BPC stood at P90 million.
“The main culprits to these debt are the Ministry of Health and Education mainly because of their demographics, internal budgeting processes which are not sufficient to cover their utility bills.
But we have met the accountant general about this. The Ministry of Finance has set up a special fund to mitigate those cases,” she said.
It is said that the corporation pays close to P57 million per month on the 80MW EDM deal and R100 million per month for the 300MW.
According to the Acting BPC chief executive Nchema Mothebe, at the maximum, the country demand stands at 610MW, but the Morupule B is sending out 260MW into the grid operating from two units. He said that the demand is expected to shoot to over 650 MW in the next few years.
Meanwhile, Guma suggested BPC should bill the contractor who was engaged for Morupule B project.
He said that BPC was currently bearing costs by importing electricity while the economy bore the pain of increasing tariffs despite spending on a power station, which if fully functional would meet the country’s demand.
“The economy is paying because tariffs are increasing. BPC is also paying by importing. This contractor has to cover this costs,” Guma said.