Thursday, February 21, 2013

Botswana wants fewer Chinese firms to receive state contracts

Khama wants fewer Chinese firms to receive state contracts
by Nicholas Kotch
Business Day (Botswana), 20 February 2013

CHINESE companies may not be collecting many more government contracts
in Botswana in the near future if Ian Khama has any say in the matter.

As he is the president of the thinly populated and resource-rich country
and since the party he leads is dominant in parliament, the prospects
for Chinese bidders for infrastructure tenders are not looking good.

"You know, we have had some bad experiences with Chinese companies in
this country," Mr Khama said in a recent interview.

"The best way I can put it is that we are very, very particular now; we
are going to be looking very carefully at any company that originates
from China in providing construction services of any nature," he told
Business Day in Gaborone.

Power generation is the key sector where China is not flavour of the
month in the office of the president. Frequent power cuts are affecting
everyone, from business and retail to ordinary people.

The disruption is not what the Batswana have known during the past
decades of rapid growth built on diamonds, agriculture and tourism.
Power shortages will not attract the large investment in railways, roads
and mining that are planned.

Mr Khama laid the blame for the chronic shortage of supply at one door.
"Right now, as we speak today, we should be totally self-sufficient if
we hadn't been let down by the Chinese…. Those generation plants at
Morupule B should have all been up and running by the end of last year —
but only one of the four is operating," he said. "We have started really
tightening up on the way Chinese companies deliver on government contracts."

The Chinese embassy in Gaborone did not respond promptly to a request
for reaction to Mr Khama's views. However, relations were excellent as
recently as 2009, a year after he became president, when Chinese firms
were running 18 construction projects in Botswana, including stadiums,
schools, hospitals, airports and public buildings.

In the same year, agreements were signed for the $1.6bn expansion of
Morupule B, financed by the Botswana government, and involving the
installation of four 150MW coal-fired units. On the basis that
everything would be up-and-running on schedule last year, Mr Khama said,
Botswana did not negotiate extra supply from South Africa's Eskom.

"Now we have had to go on our knees, begging Eskom to continue supplying
us even though they have their own challenges down in South Africa.

"They have been very generous and understanding but they cannot
guarantee an uninterrupted supply," he said, adding that he expected the
months-long shortage to be over in a few weeks.

Yet the power issue clearly rankles, perhaps because it does not project
the image — forged by Mr Khama's late father, Sir Seretse Khama — of a
quietly efficient African country where almost everything works.

Judging by Mr Khama's comments, it will be a big ask at the moment for a
Chinese company to get a slice of lucrative future rail projects. Some
of Botswana's enormous untapped coal deposits are destined to be carried
on new railways to ports in Namibia and Mozambique.

Mr Khama said if the rail projects are to be financed by private
companies, the government will have no say in the choice of
subcontractors. "But certainly, if government had anything do with it we
would be urging caution to those private companies … to ensure that you
don't have the scenario that we have experienced here, where companies
from there (China) put up a structure and after some time you find it
falling apart and needing a lot of maintenance long before maintenance
should be due," he said. "The workmanship is not the best."

Mr Khama's views can be heard across Africa but he is definitely not
with the official programme — the one endorsed by a majority of African
leaders and enthusiastically by the South African government. Bilateral
trade between Africa and China has risen swiftly, reaching $166bn last
year, according to official data in Beijing last week.

Is Mr Khama in a minority of one when China is discussed by African

"They probably won't say it publicly, but when I've spoken to others
they've expressed frustrations as well," he said. "People feel that
China is now the second-biggest economy in the world. You say things
like that, do you really want to upset such a huge power?

"But there's no point having a huge power investing in a country if
those investments at the end of the day don't do you any good."

He complained about what he considers excessive migration of Chinese to
take jobs that should be done by Batswana. He has asked the immigration
department to get him accurate numbers on the subject.

"We accept China's goods. But they don't have to export their population
to sell us those goods. That we can quite ably do. They will crowd us out."

© BDlive 2013

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