BPC costs drive P2bn supplementary budget
Mbongeni Mguni | Friday December 13, 2013 17:02
Supplementary Finance Paper No. 1 of 2013/14 was due to be discussed and passed before Parliament's closure today (Friday). By Wednesday, Parliament's Finance and Estimates Committee was still conducting meetings with the ministries seeking additional recurrent and development funds under the proposed supplementary.
Information passed to BusinessWeek on Wednesday indicates that of the total P1.98 billion in recurrent and development supplementary funding, the Finance Ministry was proposing, the Botswana Power Corporation's parent ministry alone was seeking P1.1 billion. In October, Finance Ministry officials revealed that delays in full generation from Morupule B Power Station had resulted in additional costs of P1.2 billion in emergency power purchases during the year.
The station's four units were supposed to be generating 600MW by October last year, but adverse weather, followed by a series of technical failures, delayed finalisation of the fast-tracked plant. At present, only two units are operational following failure of Unit Three late last month, while Unit Two is only due on-stream next year after suffering major faults in January.
In the initial 2013/14 budget unveiled in February, the Minerals, Energy and Water Resources Ministry received the largest development fund allocation at P2.98 billion with P300 million for the BPC's emergency power purchases. Earlier in the year, Energy Minister Kitso Mokaila told BusinessWeek that government had engaged international legal experts to assess its contractual recourse in the wake of delays at Morupule B and the associated opportunity costs.
Besides the Ministry of Minerals, Energy and Water Resources, the Agriculture Ministry has also put in a P105.7 million request for supplementary funding, which is largely for drought relief initiatives around the country. The Ministry of Trade also has a P3.9 million request under the supplementary budget's development funding component. Under recurrent expenditure, the Ministry of Education has requested P644.3 million in supplementary funding, followed by Local Government at P93 million, Finance with P41 million and Foreign Affairs with P8.6 million.
This year's supplementary budget will also feature rectification requests from three ministries valued at P255 million for the 2012/13 financial year. While the rectification requests are funds which have already been used, ministries are required to regularise the over-expenditure via Parliamentary consent. The chairman of Parliament's Finance and Estimates Committee Mephato Reatile told BusinessWeek that the supplementary budget was still under the committee's consideration.
'The budget will go to Parliament anytime now, provided the parent ministries supply the committee with the information we are seeking,' he said.'We have been meeting with them throughout the day since Monday and when we are done, we will notify the Speaker to put the supplementary budget on the notice and order papers so that it becomes a subject for discussion.' Reatile said the supplementary budget had been tabled in Parliament last Thursday. Once passed, this year's supplementary budget will join a string of similar requests dating back to the mid-2000s and ranging from P7 billion in 2008/09 budget to P3.8 billion in 2009/10, P2.4 billion in 2011/12 and P83.1 million last year.
From an initial forecast surplus of P779 million, the 2013/14 budget is now expected to post a deficit of more than P1 billion due to the Morupule B delays and other supplementary budget items.