UPDATE ON THE PROGRESS MADE IN THE BRINGING INTO SERVICE OF THE 600MW MORUPULE B POWER STATION (16TH AUGUST 2013) - MINISTERIAL STATEMENT TO PARLIAMENT 1.0 BACKGROUND 1.1 Madam Speaker, I am very grateful to you once again for affording me an opportunity to brief the Nation, through this honourable House, on progress made so far to bring into service the 600 MW Morupule B Power Station. 1.2 Madam Speaker, my last brief to this honourable House on the Morupule B Power Station was on 27th February 2013. The situation that pertained then was as follows:- a) construction of the three out of the four Units was complete and the fourth Unit was under construction; b) frequent boiler tube failures were experienced in two of the completed Units; c) none of the Units had been taken over for commercial operation by Botswana Power Corporation (BPC); d) only one Unit was feeding into the national grid; e) BPC was negotiating with the Contractor an interim arrangement to have the Units run while conditions for taking over were being fulfilled; and f) Load shedding in the country was endemic. The country’s power supply and demand situation was until Sunday 28th July 2013 characterised by massive load shedding. I am aware that it was having telling effects on the country’s economy, as electricity is an essential service. It was painful to see many areas countrywide with no power between as early as 17.00hrs to as late as 22.00hrs. I am also aware of certain areas that had no power for longer periods. 1.3 Madam Speaker, from 28th July to 15th August 2013 the situation had improved significantly characterised by no load shedding. Regrettably one unit failed yesterday 15th August 2013 and all out effort has being made to bring it back into service. I am informed that the unit may be brought back into service by Sunday 25th August 2013. I must, hasten to point out that the power supply situation will remain precarious until all the four units at Morupule B are brought into service. 1.4 Madam Speaker, without the support of the Government of South Africa, which continued to export power to our country during the difficult times the severity of load shedding, would have been even worse. I wish, therefore, to echo what His Excellency the President said in his opening remarks at the last HLCC meeting, to thank the South African Government for giving support to our country despite the serious power challenges they themselves are facing. 1.5 Madam Speaker, I also wish to thank everybody for enduring the hardships of load shedding. A lot has been written and a lot has been said about the country’s power supply and demand mismatch. I admit that the situation did get worse before it got better. 1.6 Throughout this difficult period, people with varying backgrounds worked extremely hard to stabilise the power supply situation with the ultimate aim of bringing back smiles to the faces of our people. Through the grace of God we shall continue to persevere. 1.7 Madam Speaker, throughout this difficult period we are having two priorities which are of paramount importance: a) stop load shedding; and b) stop using expensive diesel to generate electricity at Orapa and Matshelagabedi. 1.8 Madam Speaker, these priorities can only be achieved through bringing into service of the 600MW Morupule B Power Station. We are en-route to achieving both objectives. 2 Progress to date 2.1 As Members of this honourable House saw for themselves during their visit on 20th July 2013, this is the largest single and most complex project that has been undertaken in our country. I thank all those Members who found time, on a Saturday, to visit the plant. It was indeed my pleasure to host you. 2.2 Madam Speaker, I wish to state that contrary to some media reports that there are cost overruns, the Project has realised savings amounting to more than P800million. The total savings will only be known once claims and counterclaims will have been settled. 2.3 As already advised, delays in bringing the power station into service has had a telling effect on the country’s economy. To this end, Madam Speaker, the Government has employed Technical and Legal advisers, Messrs Aurecon and Norton Rose respectively and, Collins Newman, who have been the BPC Lawyers since inception of the project implementation, to advise BPC during negotiations related to the Morupule B Project. 2.4 Madam Speaker, after some intensive negotiations between BPC and the contractor Messrs CNEEC, the Interim Operations and Maintenance Agreement was reached for the operations of the Morupule B Power Plant while commercial aspects of a full Operations and Maintenance Agreement is being negotiated by the parties. 2.5 Madam Speaker, the Interim Operations and Maintenance Agreement is very critical in that it enables the contractor to operate the power plant after BPC takes over the units. 2.6 To this end I am pleased to advise that Units 1 and 3 are taken over. As already stated, I expect Unit 4 to be brought back into service in as short a time as possible. Unit 2 is due to be taken over in September 2013. Currently two units are running feeding into the national grid. 2.7 Madam Speaker, the major challenges that have hitherto occurred relate to boiler tube failures. The other major pieces of plant, namely the turbine and the generator, have hitherto performed flawlessly. The focus going forward will therefore be attending to boiler fabrication defects. The boiler which consumes 63 tonnes of coal per hour and 17 tonnes of limestone per hour when generating 150MW is a complex piece of equipment. 2.8 Madam Speaker, as I said in my 27th February 2013 statement to Parliament, plans are at an advanced stage to see how best to better BPC’s performance. To this end, the BPC Board, in consultation with my Ministry, has engaged the Electricity Supply Board International (Pty) Ltd (ESBI) to undertake a Business Review of the Corporation’s operations. The recommendations from the Business Review will be used to formulate strategy on how to better the Corporation’s operations. 2.9 As we look to the future, the Government is proceeding with the refurbishment of Morupule A Power Plant and the development of an additional 600MW of generating capacity before the end of the decade. To this end a tender for 300MW Brownfield Power Plant closed on June 19th 2013 and a tender for 300MW Greenfield Power Plant is currently running. 2.10 On a completely different note, I wish to inform this honourable House of impending changes to the membership of the Botswana Power Corporation Board of Directors. Four Board Members, namely:- a) Board Chairman; b) Board Vice chairman; and c) Two Board Members; have resigned, from the Board. Having reached a milestone of a fairly secure power supply situation, they felt it was time to pass on the baton. I pay tribute to the four BPC Board Members, who have served the Corporation for a long time and have decided to resign as Board Members with effect from 30th September, 2013. Through their efforts, they contributed positively to moving the Corporation forward even during some very difficult times. They stayed with the ship through the turbulent storms and feel it is time to move on now that the ship is on calmer waters. I thank them for a race well run and wish them well in their future endeavours. 3 Conclusion In conclusion Madam Speaker:- 3.1 Since my last statement to Parliament, reasonable progress has been made to stabilise the country’s power supply situation. Whereas there was no load shedding from 28th July 2013 to 15th August 2013, the power supply situation will remain precarious until all the 4 Units at Morupule B are brought into service. In this regard, an all-out effort is being made to bring Unit 2 and Unit 4 at Morupule B into service, thereby ensuring that the supplies are secure; 3.2 Loss to the economy brought about by the delay in bringing the 600MW Morupule B Power Station is an issue which has occupied our mind and our top priority still remains that of avoiding load shedding; 3.3 The Government’s commitment to ensuring that history does not repeat itself, in the form of load shedding, in the medium to long term is total, with the decision to refurbish Morupule A Power Station and develop 600MW of new generating capacity before the end of the decade; 3.4 I wish to thank you for your continued patience and enduring the difficult period that the country’s electricity supply industry is going through. We would not have come this far without your support. I wish to assure the nation that we shall continue to remain transparent on the power supply situation by keeping you fully informed. Le kamoso!!! 3.5 Thank you, Madam Speaker.
Posted on: Fri, 16 Aug 2013 12:03:08 +0000
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