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Govít P350 million fuel outsourcing divides opinion

Members of the public and stakeholders in the oil and petroleum industry have expressed various and divergent views regarding a proposed move by government that intends to offload fuelling services of government vehicles to the private sector.

Public Enterprises Evaluation and Privatisation Agency (PEEPA) as the organisation assigned mandated to oversee smooth privatisation of any government service or entity is currently conducting consultations workshops countrywide gather public and stakeholder views regarding the move. Some attendants at a consultation workshop held in Gaborone late last week  raised  concerns that the proposed privatization would only stand to benefit a select few and further create industry monopoly at the advantage of already established fuel stations operators.

Some stakeholders have expressed fears around issues of efficiency saying an uncoordinated and disorganized move could result in a poor service which would halt government transport based operations and hurt economic activities. Currently government fleet is housed under Central Transport Organization (CTO) in the Ministry of Transport and Communication with fuelling, maintenance and servicing of vehicles as some of the organization‘s mandate. On an annual basis government expenditure on fuelling government fleet is in the region of P350 million.

PEEPA says the whole idea is for government to withdraw from commercial activities that could be better undertaken by the private sector and be left with planning, monitoring and creating a conducive environment for private sector to flourish and create employment.  “Government would then be relieved of administrative and implementation burden in turn private sector participation in the economy would expand,” explained Director of Public Service Outsourcing at PEEPA Ishmael Joseph.  

Joseph explained that contrary to some public concerns, outsourcing fuelling services would stand to benefit the whole entrepreneurial citizenry as it would promote direct participation of all business people in ownership of national assets. “In the process, privatizing these services would cultivate indigenous participation and push for more citizen ventures and participation in the fuel station operation business” said Joseph.

Currently government operates 33 fuel stations across the country under the CTO. According to information from PEEPA government will remain in operation of some fuel stations as strategic reserves and readiness facilities for times of shortages and crises in the fuel industry.
“We are convinced that this move would birth a significant number of new jobs in the private sector as government business brings in an additional P350 million boost into the industry,” he said.

However, some workshop attendants say venturing into the oil and petroleum business is steep for indigenous citizens considering the capital requirement associated with establishing such a business. It is therefore under this backdrop that the move to hand over fuelling government fleet to private owners has been labelled by many as a move that will only benefit privileged business people.  “The fuelling station operation business remains dominated by few business conglomerates that are linked to few business families,” argued one of the attendants at the workshop.

Various submissions at the workshop were centred on the fact that the capital intensive nature of the business would make it difficult for indigenous Batswana to have a share in the P350 million cakes. Botswana Oil Limited, a state owned enterprise established in 2015 has been tasked with amongst theirs   facilitation of citizen participation in the oil and gas industry. Botswana’s economy is largely driven by oil, with 67 percent of the country‘s energy driven by oil. Consuming at least 1.2 billion litres of fuel annually.

Botswana Oil has been conducting countrywide workshops to capacitate, encourage and promote indigenous citizen participation in the bulk procurement segment of this lucrative business. In an interview with BusinessPost this week Botswana Oil noted that for their part they have been pushing citizen participation in the bulk segment of the business. “Our country wide workshops were a strategic move that looks at empowering citizen companies to emerge as future oil and gas multinational companies capable of covering the nation with strategic stock in case of any disruption in the supply chain.”

Still at the PEEPA workshop stakeholders advised that the migration of this service to the private sector should be conducted with proper prior readiness to avoid inefficiencies that could possible hurt government operations and negatively affect the economy.
 “If the engaged private filling stations are not ready and organized for this load then we will have a problem”. However, Raphel Ramatu Deputy Director at CTO explained that his organisation has advertised a call for expression of interest calling independent entities to bid for a tender that would create an integrated system to enable proper evaluation, monitoring of the outsourced service.

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China’s GDP expands 3% in 2022 despite various pressures

2nd February 2023
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.

The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.

In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.

Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.

China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.

Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.

On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.

According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.

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Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

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Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

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