The Botswana Power Corporation (BPC) has cancelled an exclusive agreement with PPC Botswana for the supply of fly ash to the cement company following intervention from the Competition Authority (CA).
Fly ash is one of the residues generated by coal combustion and is used as an additive in the cement manufacturing process.
According to a CA statement, the cancellation came after a market inquiry that was conducted under the auspices of the African Competition Forum, where they found out that the fly ash at Morupule Power Station was exclusively supplied to PPC, making it difficult for other players to source it.
The agreement’s duration was for over a period of 10 years renewable every five years.
“During our cement market inquiry, we established that the agreement between Morupule Power Station and PPC Botswana was exclusive and anti-competitive in nature as it created a barrier to access raw material,” reads part of the statement.
Following CA’s intervention, the agreement was terminated hence lifting barriers to the access of fly ash by other players.
Although the agreement was made before the enactment of the Competition Act in 2009, it continued even after the law was introduced.
The Competition Act does not apply in retrospect meaning that the authority cannot investigate offences committed before 2009.
In another case, an anonymous person contacted the authority having observed that two wholesalers, Trans Africa (Pty) Ltd and Sefalana Cash and Carry (Pty) Ltd, only sold Blue Crystal sugar and refused to sell other sugar brands.
CA’s intervention led to the lifting of barriers to entry when two local sugar brands Selati and Pure Sugar managed to enter the market of the two wholesalers.
Reads the CA statement: “Two market entrants are expected to enter and access the market for Trans Africa and Sefalana Cash and Carry”.