Morupule B expansion in new headway
Staff Writer | Friday October 21, 2016 16:58
Locally based companies felt they were sidelined in the multi billion pula tender, as government decided not to open the tender for Morupule expansion to everyone.
The Chinese built Units 1-4 as well as Units 5-6, which are currently being built by a Japanese and South Korean joint venture, were awarded through open tenders.
In a notice published this week, the Public Procurement and Asset Disposal Board (PPADB) announced it has given government the green light to directly appoint legal and transaction advisers for the construction of the Units 7 and 8 at Morupule B, which will produce 300MW.
“The PPADB has approved a request from the ministry of mineral resources, green technology and energy security to use the direct appointment method to engage TDI as transaction advisors and Norton Rose Fullbright as legal advisors for the development of 300MW power units 7&8 at the Morupule B site,” read the notice.
Norton Rose has previously acted as government advisers at the peak of the tiff with Chinese contractor, CNEEC in 2013.
Earlier this year, the PPADB approved government request to use the direct appointment method to engage a joint venture between two South Korean firms, KEPCO and Daewoo, to construct unit 7 and 8 at Morupule B.
But the decision seems to have rubbed Botswana based coal and energy firms the wrong way saying the decision to directly appoint a South Korean joint venture not only eliminates competition, but also derails private sector participation in the economy.
In a statement, Botswana Stock Exchange (BSE)-listed African Energy says the South Korean consortium has no operations in Botswana and has not previously invested anything in the country, while Botswana-based coal and energy companies have made considerable progress towards exploration and development of mines and power stations.
“African Energy, Jindal Botswana and Shumba Energy have invested an estimated P3 billion in the past 10 years and created employment for over 300 Batswana.
The government’s decision could have a negative impact on the participation of private-sector coal companies in assisting with diversifying the economy. Companies in the country have had their sights on a government’s 300MW greenfield power plant tender, which is now at risk of being handed over to the international consortium,” said the company.
Local coal and energy companies have been eyeing government’s proposed 300MW greenfield power plant tender which first floated in 2013, but now feel that the power station will never see the light of day due to the coming on stream of Unit 7 and 8.
With Unit 7 and 8, local power production will be catapulted to over 1,300MW, well above local demand.