Job loss fears in management takeover of BPC

MBONGENI MGUNI & BRIAN BENZAM
Staff Writer | Tuesday March 5, 2013 00:00

 

BPC workers' union general secretary, Bohithetswe Lentswe told Mmegi Business that staff are scared because job losses are 'inevitable' if the consultants from Electricity Supply Board International take over. BPC has nearly 2,000 workers. 'The union met with the management this morning (yesterday) and were told that the consultants will assess the corporation's systems, operations and shortcomings,' Lentswe said.

'This is something we have just been told. We want to take it forward as a stakeholder and see what our input is. Job losses are inevitable in such exercises and it's something that we are afraid of,' he asserted. He said workers received a notice of possible rationalisation last year, although nothing has happened since then. It is currently unclear how the union will relate to the Irish consultancy, as its labour agreement is with the existing BPC management.  The latest developments at BPC follows an announcement by Minerals, Energy and Water Resources' Minister, Kitso Mokaila last week that talks are ongoing with Electricity Supply Board International (ESBI) for a two to three year management contract to manage BPC. The minister told Mmegi Business that government's intention is not to lay off workers but to turn around the utility's financial and technical performance.

He said this was critical as the parastatal's scope of operations is expanding from just being a retailer to a power generator and distributor. 'We have to reinvent and redirect BPC so that it becomes relevant to the environment it is operating in.  Independent Power Producers (IPP) are also coming on board and BPC will need to have the capacity to manage the Power Purchase Agreements (PPA). At the end, we want to see BPC running profitably and being weaned off government subsidies. Our intention is not to fire workers,' he said.

On the back of static tariffs against high operating costs, BPC has been running perennial loses with estimates for the 2011-2012 financial year, projecting a loss of P87 million.The corporation posted a loss of P607 million in 2010-2011 and a P563.6 million loss in 2009-2010. Between 2010-2011 and 2011-2012, government allowed tariff adjustments ranging between 15 and 30 percent and pumped nearly P1 billion in subsidy grants to BPC, thus ameliorating the losses to some extent. Government's decision to hand over control of the struggling corporation to the consultants comes at a time when management contracts are gaining popularity as an element of commercialising power utilities and eventually privatisation.

Although Mokaila said that ESBI, which has done some consulting work for Eskom of South Africa and Nampower in Namibia, is just one of a few other companies that government is in talks with, the Irish firm seem to be the leading contenders to win the management contract.BPC union leaders said representatives of ESBI had already been to the Corporation and are expected to return soon.A handful of other countries such as Namibia, Madagascar, Tanzania, Kenya, Rwanda and Lesotho have in the recent past introduced management contracts in their power sectors. This will be the second time that government has attempted to hand over the administration of a parastatal to a foreign  firm following the 2008's collapse of contract negotiations for the management of state-owned Air Botswana  by Comair.