12 Feb 2020

 Parliament has been informed that China National Electric Engineering Company (CNEEC SBW) was recommended and appointed as the engineering, procurement, construction (EPC) contractor at a contract value of P10 624 106 111.95 (US$ 970 064 364.)

Minister of Mineral Resources, Green Technology and Energy Security, Mr Lefoko Moagi said US$909 993 618 00 had been paid to the contractor.

The amount paid, he explained, took into account the retention fee deductions applied to all invoices and excluded all other penalties which were still being levied to the contractor, including remediation and maintenance costs of some of the plant items deemed defective during handover of the plant for commercial operation by Botswana Power Corporation (BCP).

“The contractor CNEEC SBW has been held responsible for these costs since 2012 and will stop after all the identified defects are corrected through the ongoing four year remediation projects which commenced in July 2019,” he said.

Minister Moagi further noted that the maintenance costs of the plant since April 2012 to December 2019 amounted to P2 461 420 319.65.

He further stated that an engineering consultant, Fichtner had been rendering engineering services to BPC as owner’s engineer during construction and implementation of the Morupule B defect remediation project by the EPC contractor (CNEEC-SBW) since May 2009 to January 2022 at a cost of P407 840 476.

Mr Moagi also highlighted that other than the approved variation orders amounting to P103 872 683.22 which were duly authorised through appropriate governance structures there was no construction cost overrun.

The variation orders were related to items such as equity, construction of culvert under rail spur, relocation of construction water pipeline, switch yard road access to the transformer and reactor bays, reactor foundation, ash yard and limestone road weigh bridge.

In addition, he said there had been no forensic audit of Morupule B. 

However, the plant had undergone regular audits as part of the normal BPC control framework.

 He noted that the audit findings were shared with the parliamentary committee on statutory bodies, which was a committee of Parliament. 

In this regard, there was no need for direct submission of the findings to Parliament.

Minister Moagi also added that there had been performance weaknesses in the construction of the power station, adding that those weaknesses had been identified and were being rectified.

In addition, he said there had been no suspicious activities to warrant a specific forensic audit, which if carried out would be at significant cost. ENDS