Outsourcing Leads To 530 Job Losses At BPC

Staff Writer | Monday February 18, 2019 12:01

 

According to BPC’s CEO, Stefan Schwarzfischer the changes were driven by the state-owned power utility’s objective to outsource services to the private sector to increase efficiency particularly roles that were not core business such as cleaners, security guards and vehicle fleet maintenance.

“On staff rationalisation, the Corporation took a profound decision to invest in areas which were lacking through training of staff and capacity building. To date, the Corporation has got 140 more employees than at the beginning of the restructuring exercise,” he said.

BPC embarked on a restructuring journey at the beginning of 2017 with an aim of turning around its fortunes and reduce reliance on government for subsidies. The five-year programme was divided into two years of restructuring, three years of process re-engineering and customer service improvement.

Masa 2020 envisages the BPC as a profitable entity free from a reliance on government, operating efficiently and serving its customers. The strategy became necessary as the BPC continued bleeding billions of Pula in annual losses, while operational inefficiencies piled up and services standards plummeted.

“BPC has successfully completed the two year restructuring and retrenchment exercise with the results as the Corporation received for the first time in 15 years, a non-going concern certificate by its auditors PWC Botswana,” he said.

He said for the first time in a long time, the Corporation’s accumulated profit increased by P 2 billion and at the same time government tariff subsidy was reduced from P 1.6 billion to P 800 million, making a reduction of P 867 million.

“This is a clear indication that BPC is achieving its financial independence objective as per the MASA 2020 Transformation Strategy. Furthermore, the Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) increased from minus 33% to plus 16%,” he said. The Corporation has also increased the Morupule B Power Station (MBPS) maintenance staff and in parallel up skilled and trained its operational staff to increase availability from 67% in September 2016 to 74 % in January 2019.

This significant change led to import reduction of power to P 880 million, which reduced the required consumption of imported power from 55% down to 12 %. While the production cost for MBPS stayed quite stable over the years with approximately 50 Thebe/kWh the average costs per electricity unit also went down from 131.12 Thebe/kWh to 108.03 kWh, which is a cost reduction of 17.6%.