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Water crisis: Another NSC shutdown on the cards

Close down on the pipeline next week

It doesn’t rain but pours for the beleaguered Water Utilities Corporation (WUC); as yet another shutdown on the North South Carrier is expected, next week.


The NSC 1 pipeline has lately been prone to excessive shutdowns that often lead to the Greater Gaborone areas running on dry taps for days and sometimes effectively rolling into weeks.


According to highly placed sources at the WUC, “next week Friday the NSC will be shut down again.” During this period the Greater Gaborone area will experience increased supply outages.


“The shutdown is meant to ensure proper interconnection in the system that is currently done for the refurbishment of the pipeline that was laid in place of the GRP pipeline,” a WUC official told the WeekendPost.


It is understood that there is a 26km pipeline made of material called GRP (Glass-fibre Reinforced Polyester) – is the weakest part of the NSC pipeline. These pipes made of centrifugally cast glassfiber reinforced plastics (GRP) which consist of a combination of thermosetting plastics such as for example unsaturated polyester or vinyl ester resins, chopped glass fibers and reinforcing agents. GRP are generally of low standard.


The part, which is 26 km out of the 365 km NSC 1 is said to be problematic. “It has a lot of leakages because of GRP which is essentially a weak material. It’s no longer helpful and therefore requires to be replaced,” he said.


This publication has gathered that the Ministry of Minerals, Energy and Water Resources (MMEWR) has replaced the weak link with a steel pipeline. “It now has to interconnect to the NSC 2 pipeline which is currently under construction. In other words we have to move from the weakest link to the new pipeline made of steel.” “The shutdown is meant to ensure that we transfer from NSC 1 weak link to the new one made of steel.”


It will not be the first time the pipeline is closed. Recently, on 4th September 2015, the pipeline was shut to repair a leakage around the Bonwapitse area. The pipeline also “experienced a pipe burst upstream” at Palapye earlier in May, and WUC had to shut it down to carry out the necessary repairs.


On January 7, 2014 the corporation also closed the pipeline to allow for repairs following another burst. The shutdowns have often resulted in periods of no water supply in the Greater Gaborone area, outside the water rationing schedule.


The North South Carrier Scheme I (NSC I) is a pipeline that transports water from Letsibogo Dam to the South of the country and supplies Palapye, Mahalapye, Serowe and the Greater Gaborone area which includes essentially the Southern part of Botswana.


Information gathered also suggests that as from the 9th of March this year the newly commissioned Dikgatlhong Dam has also been supplying water to these areas through the same pipeline, relieving the Letsibogo Dam.


However the immaculate source at WUC pointed out that the shutdown was about interconnections and fixing certain leakages. “This time around we want to allow the contractor doing the parallel line to switch from the current to the new one. We already have NSC 1 while NSC 2 is still under construction. The 26 km pipeline has been brought up as part of NSC 2. We are building a parallel 26 km, which is part of NSC 2.”


The WUC Corporate Communications Manager, Matida Mmipi who was not immediately available for comment at press time, is expected to address the media before the NSC 1 shutdown scheduled for next week.
Future of Molatedi dam supply to Botswana “uncertain”


Meanwhile, more water woes are expected as Molatedi Dam in South Africa, which has been supplying 26ml/day to Botswana is drying up. The dam is now said to be supplying reduced amounts of 4.8 millilitres per day. Recent Media reports have alluded to officials in that country considering cutting off supply to Botswana.


Weekend Post has turned up information that the WUC has been in a series of meetings with their South African counterparts to discuss the matter further. “They are constantly reviewing the amount that is coming to Botswana and it will not be a surprise that they will cut water to Botswana,” the WUC official told this publication.


WUC Board Chairperson, Matome Malema told this publication that Molatedi dam is still supplying to Botswana and they have not cut ties with them. He said the agreement they have with them still stands. “As far as I know, they did not cut ties, our agreement is that when the dam goes down they reduce the amount they give us,” Malema maintained.


According to CCTV Africa, South Africa is set to cut off Botswana from receiving water supplements after Molatedi Dam dropped to extremely low levels. The dam is located near Zeerust in North-West South Africa. For years Gaborone has been receiving water from South Africa but an agreement dating back to 1988 required that when the dam level dropped by 26 per cent, supply would be cut.


Paul Bender to replace Leornard Nxumalo at WUC?


International media reports have been abuzz with reports that former Cleveland Public Utilities Director Paul Bender has resigned effective October 7, and linking him with WUC in Botswana.


Bender is alleged to have asserted that his work in Cleveland was both challenging and rewarding, but he “has an opportunity to help the Republic of Botswana ‘consolidate all water and waste water services to the national level.’”


However, the Weekend Post source said he was not aware whether Bender will be employed full time at the corporation, saying, “Bender has always been advising WUC on how to structure the tariff.”


He stated: “he has been around to advice on tariff framework – how to structure it, how you charge water to customer in terms of volumes, and if you consume a certain volume how much you charge, he is an expert in the area.”


Bender, who is said to have received $200,000 a year as utilities director, was permitted to remain an outside consultant and take unpaid leaves of absence to do work for other clients, including Botswana.


“His work as a consultant and then director was critical to improving customer service in the Division of Water, the implementation of the automated meter reading program and putting the Division on track to be able to potentially not raise water rates for five years beginning in 2015,” his former employer mayor Frank Jackson wrote on North East Ohio media Group.


Jackson hired Bender as chief of public utilities in March 2013, after he had spent two years working as a consultant to oversee sweeping improvements to a Water Department plagued by billing problems, staffing inefficiencies and complaints of poor customer service.


Under Bender's tutelage, calls are now answered more promptly, bills are timely, and the collections rate has spiked to more than 99 percent, the city has reported. “The department is installing an automated meter-reading system throughout its 72-community service area — which is expected to end the department's practice of estimating bills when faulty meters go undetected for an entire billing cycle.”


In Botswana, some believe that he was supposed to be Chief Executive Officer prior to the appointment of Swazi born Leornard Nxumalo. Nxumalo has a fixed contract that ends in March 2017 and those close to the top man say that its renewal is dependent on whether at its end, he or the employer will be willing to renew it. “He is doing his best at the beleaguered corporation but he may leave before 2017 as he has offers in his country Swaziland,” one source close to the CEO said.


Malema however dismissed the assertion as baseless and indicated to this publication in a brief interview that there was no how Bender would come to Botswana to replace the current CEO. “No, there is nothing like that, he won’t replace the CEO,” the board chairperson insisted.


He pointed out that Bender “is just a consultant, we have a relationship with him in that we used his services before, in terms of tariffs.”  


Information gathered suggests that Bender's résumé boasts 30 years of financial management and consulting experience, including two decades as chief financial officer for municipal gas, water and wastewater utilities in Washington, D.C., and Richmond, Va.


However it is still unclear which role he could assume at the struggling water corporation, should he come.

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Mowana Mine to open, pay employees millions

18th January 2022
Mowana Mine

Mowana Copper Mine in Dukwi will finally pay its former employees a total amount of P23, 789, 984.00 end of this month. For over three years Mowana Copper Mine has been under judicial management. Updating members, Botswana Mine Workers Union (BMWU) Executive Secretary Kitso Phiri this week said the High Court issued an order for the implementation of the compromise scheme of December 9, 2021 and this was to be done within 30 days after court order.

“Therefore payment of benefits under the scheme including those owed to Messina Copper Botswana employees should be effected sometime in January latest end of January 2022,” Kitso said. Kitso also explained that cash settlement will be 30 percent of the total Messina Copper Botswana estate and negotiated estate is $3,233,000 (about P35, 563,000).

Messina Copper was placed under liquidation and was thereafter acquired by Leboam Holdings to operate Mowana Mine. Leboam Holdings struck a deal with the Messina Copper’s liquidator who became a shareholder of Leboam Holdings. Leboam Holdings could not service its debts and its creditors placed it under provisional judicial management on December 18, 2018 and in judicial management on February 28, 2019.

A new company Max Power expressed interest to acquire the mining operations. It offered to take over the Mowana Mine from Leboam Holdings, however, the company had to pay the debts of Leboam including monies owed to Messina Copper, being employees benefits and other debts owed to other creditors.

The monies, were agreed to be paid through a scheme of compromise proposed by Max Power, being a negotiated payment schedule, which was subject to the financial ability of the new owners. “On December 9, 2021, Messina Copper liquidator, called a meeting of creditors, which the BMWU on behalf of its members (former Messina Copper employees) attended, to seek mandate from creditors to proceed with a proposed settlement for Messina Copper on the scheme of compromise. It is important to note that employee benefits are regarded as preferential credit, meaning once a scheme is approved they are paid first.”

Negotiated estate is P35, 563,000

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Councilors’ benefits debacle-savingram reveals detail

18th January 2022

A savingram the Ministry of Local Government and Rural Development sent to Town Clerks and Council Secretaries explaining why councilors across the country should not have access to their terminal benefits before end of their term has been revealed.

The contents of the savingram came out in the wake of a war of words between counselors and the Ministry of Local Government and Rural Development. The councilors through the Botswana Association of Local Authorities (BALA) accuse the Ministry of refusing to allow them to have access to their terminal benefits before end of their term.

This has since been denied by the Ministry.  In the savingram to town councils and council secretaries across the country, Permanent Secretary in the Ministry of Local Government and Rural Development Molefi Keaja states that, “Kindly be advised that the terminal benefits budget is made during the final year of term of office for Honorable Councilors.”  Keaja reminded town clerks and council secretaries that, “The nominal budget Councils make each and every financial year is to cater for events where a Councilor’s term of office ends before the statutory time due to death, resignation or any other reason.”

The savingram also goes into detail about why the government had in the past allowed councilors to have access to their terminal benefits before the end of their term.  “Regarding the special dispensation made in the 2014-2019, it should be noted that the advance was granted because at that time there was an approved budget for terminal benefits during the financial year,” explained Keaja.  He added that, “Town Clerks/Council Secretaries made discretions depending on the liquidity position of Councils which attracted a lot of audit queries.”

Keaja also revealed that councils across the country were struggling financially and therefore if they were to grant councilors access to their terminal benefits, this could leave their in a dire financial situation.  Given the fact that Local Authorities currently have cash flow problems and budgetary constraints, it is not advisable to grant terminal benefits advance as it would only serve to compound the liquidity problems of councils.

It is understood that the Ministry was inundated with calls from some Councils as they sought clarification regarding access to their terminal benefits. The Ministry fears that should councils pay out the terminal benefits this would affect their coffers as the government spends a lot on councilors salaries.

Reports show that apart from elected councilors, the government spends at least P6, 577, 746, 00 on nominated councilors across the country as their monthly salaries. Former Assistant Minister of Local Government and Rural Development, Botlogile Tshireletso once told Parliament that in total there are 113 nominated councilors and their salaries per a year add up to P78, 933,16.00. She added that their projected gratuity is P9, 866,646.00.

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Households spending to drive economic recovery

17th January 2022

A surge in consumer spending is expected to be a key driver of Botswana’s economic recovery, according to recent projections by Fitch Solutions. Fitch Solutions said it forecasts household spending in Botswana to grow by a real rate of 5.9% in 2022.

The bullish Fitch Solutions noted that “This is a considerable deceleration from 9.4% growth estimated in 2021, it comes mainly from the base effects of the contraction of 2.5% recorded in 2020,” adding that, “We project total household spending (in real terms) to reach BWP59.9bn (USD8.8bn) in 2022, increasing from BWP56.5bn (USD8.3bn) in 2021.”  According to Fitch Solutions, this is higher than the pre-Covid-19 total household spending (in real terms) of P53.0 billion (USD7.8bn) in 2019 and it indicates a full recovery in consumer spending.

“We forecast real household spending to grow by 5.9% in 2022, decelerating from the estimated growth of 9.4% in 2021. We note that the Covid-19 pandemic and the related restrictions on economic activity resulted in real household spending contracting by 2.5% in 2020, creating a lower base for spending to grow from in 2021 and 2022,” Fitch Solutions says.

Total household spending (in real terms), the agency says, will increase in 2022 when compared to 2021. In 2021 and 2022, total household spending (in real terms) will be above the pre-Covid-19 levels in 2019, indicating a full recovery in consumer spending, says Fitch Solutions.  It says as of December 6 2021 (latest data available), 38.4% of people in Botswana have received at least one vaccine dose, while this is relatively low it is higher than Africa average of 11.3%.

“The emergence of new Covid-19 variants such as Omicron, which was first detected in the country in November 2021, poses a downside risk to our outlook for consumer spending, particularly as a large proportion of the country’s population is unvaccinated and this could result in stricter measures being implemented once again,” says Fitch Solutions.

Growth will ease in 2022, Fitch Solution says. “Our forecast for an improvement in consumer spending in Botswana in 2022 is in line with our Country Risk team’s forecast that the economy will grow by a real rate of 5.3% over 2022, from an estimated 12.5% growth in 2021 as the low base effects from 2020 dissipate,” it says.

Fitch Solutions notes that “Our Country Risk team expects private consumption to be the main driver of Botswana’s economic growth in 2022, as disposable incomes and the labour market continue to recover from the impacts of the Covid-19 pandemic.”
It says Botswana’s tourism sector has been negatively impacted by the Covid-19 pandemic and the related travel restrictions.

According to Fitch Solutions, “The emergence of the Omicron variant, which was first detected in November 2021, has resulted in travel bans being implemented on Southern African countries such as South Africa, Botswana, Lesotho, Namibia, Zimbabwe and Eswatini. This will further delay the recovery of Botswana’s tourism sector in 2021 and early 2022.”  Fitch Solutions, therefore, forecasts Botswana’s tourist arrivals to grow by 81.2% in 2022, from an estimated contraction of 40.3% in 2021.

It notes that the 72.4% contraction in 2020 has created a low base for tourist arrivals to grow from.  “The rollout of vaccines in South Africa and its key source markets will aid the recovery of the tourism sector over the coming months and this bodes well for the employment and incomes of people employed in the hospitality industry, particularly restaurants and hotels as well as recreation and culture businesses,” the report says.

Fitch Solutions further notes that with economies reopening, consumers are demanding products that they had little access to over the previous year. However, manufacturers are facing several problems.  It says supply chain issues and bottlenecks are resulting in consumer goods shortages, feeding through into supply-side inflation.  Fitch Solutions believes the global semiconductor shortage will continue into 2022, putting the pressure on the supply of several consumer goods.

It says the spread of the Delta variant is upending factory production in Asia, disrupting shipping and posing more shocks to the world economy. Similarly, manufacturers are facing shortages of key components and higher raw materials costs, the report says adding that while this is somewhat restricted to consumer goods, there is a high risk that this feeds through into more consumer services over the 2022 year.

“Our global view for a notable recovery in consumer spending relies on the ability of authorities to vaccinate a large enough proportion of their populations and thereby experience a notable drop in Covid-19 infections and a decline in hospitalisation rates,” says Fitch Solutions.
Both these factors, it says, will lead to governments gradually lifting restrictions, which will boost consumer confidence and retail sales.

“As of December 6 2021, 38.4% of people in Botswana have received at least one vaccine dose. While this is low, it is higher than the Africa average of 11.3%. The vaccines being administered in Botswana include Pfizer-BioNTech, Sinovac and Johnson & Johnson. We believe that a successful vaccine rollout will aid the country’s consumer spending recovery,” says Fitch Solutions.  Therefore, the agency says, “Our forecasts account for risks that are highly likely to play out in 2022, including the easing of government support. However, if other risks start to play out, this may lead to forecast revisions.”

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