Shake-up sweeps through BPC

Boitshepo Majube | Thursday April 17, 2014 14:32

 

Business Week: What informed BPC Board to engage a management contract?

Sebetela: In the last two to five years, the business has changed significantly in terms of the scope and complexity. BPC has ventured into generation of power, something that they were not a significant player in.

We need to build capacity to deliver on our mandate, and the purpose of this intervention is to achieve exactly that, to provide the necessary support and capacity building that is required for BPC to deliver its mandate. The BPC has had to do and will continue to do certain things, it will continue to deliver major projects.

Business Week: What are ESBI’s deliverables in the year contract period?

Sebetela:  There are current projects we are seeking to optimise, one being Morupule B power station. It has a major bearing on the medium to long-term capacity of BPC to deliver on its mandate.

So one important deliverable that BPC has to undertake is to design its projects, build them, and deliver them on time and on budget.  It’s an important aspect of capacity that BPC must have. We can all agree that this capacity as it is right now is not at required level.

The other deliverable of importance is the financial performance of BPC. The Act that establishes BPC requires that the corporation should be in a position where it does not rely on government subsidies and financial support on a daily basis. It needs to run its operations and finance its current and long-term operations on a commercially sound basis.

The third deliverable is efficiency and effectiveness of its operations. Once the assets are there, as we have the likes of Morupule B and Morupule A, we must be able to produce electricity at required volumes, on consistent and reliable basis at a level that is comparable to utility companies like us. The deficits we have had in terms of producing electricity shows us that we need to build capacity, to be able to produce electricity on more consistent and reliable basis.

Those are major deliverables that we should deliver on.

The motive for bringing in ESBI as you ask, is for building capacity while making sure that all these performance requirements are achieved, that the first deliverable is the contractor, but also to build human capacity to make sure that this level of performance is sustained into the future. As BPC we need to raise our operations, with the contractor assisting, we also need to capacitate our human resource.

We wouldn’t want a situation whereby we raise our performance and our people are left behind. We want them to acquire skills in order to maintain the performance.

Business Week: What is the fate of the current BPC staff, especially the chief executive officer?

Sebetela: As things stand now, we are expecting current BPC management and staff to be part of this transformational journey. Obviously we won’t be running BPC as it has been run, we need to run it differently. It is going to be important for our people to gain capacity, skills and whatever that needs to be done.

Under the supervision of the board we would make sure that the contractor finds all the players, individuals within BPC, where they are now, where they need to be, and that would be defined.

We see BPC management and employees as part of the transformation to this process that is going to happen.

Business Week: Is BPC staff going to be working under ESBI?

Sebetela: It will be one team working together to deliver all these things that needs to be done. Of course we would be holding ESBI responsible for ensuring that all the necessary coordination, direction and leadership is provided.

Business Week: Are there going to be retrenchments at BPC?

Sebetela: You know when you talk about transformation, and I think you will agree with me transformation is not about tinkering with the edges, it means fundamentally changing the nature of something.

The nature of change will unravel as we start implementing and defining the scope of work that needs to happen to this transition, so I would not be in a position to say to you we are going to change this area, or that area, or that position. What is important for us is to take BPC from where we know it is not performing to standard. At the moment all work would be to define what this transformation is all about. Changes are necessary; and whatever changes necessary will be made.

Business Week: Any plans to acquire more assets by BPC?

Sebetela: The question of assets is very clear; it is in the public space. There is the 300 mega watts brown fields that will happen, the 300 mega watts green field project still have to evolve in terms of where it is going to be, procurement process is starting or has started. 

Business Week: What is the update on Morupule B?

Sebetela: All the plans put in place are going well, all the milestones we have set ourselves are going well. We expect unit 2 to be up and running in May and unit 3 by the end of June. There is good cooperation of terms working on the ground.

Morupule B is important to BPC financial turnaround, we can generate power at cheaper rates in Morupule than importing at prime rates that is significantly higher than the power we can generate ourselves. So it is very important that we turnaround Morupule B as soon as possible, stabilise it to make sure that it is sustainable and reliable.

Business Week: Has BPC sorted out conflicting roles with the contractor at Morupule B?

Sebetela: There hasn’t been a conflicting of roles, it’s really been the contractor having to deliver on or meeting the deliverables they were expected to deliver on the contract. In December a decision was taken that they would be taken off from operating the power station to the role of delivering whatever is outstanding on the project aspects of Morupule B. That is what they are focusing on right now.

All the aspects I have mentioned of bringing Morupule B on line are being done with their help. The contractor we have engaged is doing the operation of the plant.

Business Week: Any business venture for BPC?

Sebetela: There is an opportunity for BPC to commercialise some of its infrastructure that it currently has, particularly the fibre optic network that the company has around the country which was built primarily to monitor and control operations.

There is enough capacity to commercialise. There is work being done to see whether they are commercial entities out there that can partner with us to make this commercialisation possible.

Business Week: Is BPC engaging different countries to sources power?

Sebetela: We would continue to engage different countries like Mozambique, to see what kindof support they can give us, it has not been finalised in terms of contractual terms. We have been getting some amount of electricity from Zambia, Namibia and we will continue to do so until the situation at Morupule is stable, and we are able to meet our demand. For as long as we have these deficits, we would continue to source power from outside suppliers.

Business Week: How much are you paying ESBI?

Sebetela: I am not in a position to say that. Negotiations to procure ESBI’s services for this contract are still ongoing, so we haven’t finalised on the contract sum

Business Week: Any message to Batswana about the power shortages they have experienced?

Sebetela: All I can say is that we are fully cognisant of the difficulties our economy has suffered because of the power shortages. The interventions we have put in place are aimed at addressing this difficult situation.

 For now we need a bit of patience and understanding from our stakeholders, the business community, the public that all have a stake. We are doing everything we can to address this problem; no stone is being left unturned.