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PEEPA propositions on BMC, Air Botswana

Publishing Date : 11 February, 2019

Author : REARABILWE RAMAPHANE

Public Enterprises Evaluation and Privatisation Agency (PEEPA) is currently moving with speed to complete and file their proposed model and strategy documents for privatization of Botswana Meat Commission (BMC) and Air Botswana.


 The two state owned enterprises have been on the trenches of restructuring dialogue and privatisation conversations for the past 10 years.  The emphases to offload  the two state owned beef and air services outfits emanates from the fact that the two parastatals  have been closing their year-on-year trading periods on negative balance sheets, recording  losses and failing to pay dividend to government.


Chief Executive Officer (CEO) of PEEPA Obakeng Moumakwa told WeekendPost on Monday that their strategic proposition on the business models and privatisation structure of BMC and Air Botswana will be presented to government before end of half year 2019.  PEEPA chief explained that following government‘s decision to liberalise the beef industry and open up the market with regard to beef oversea exportation, more players will emerge mirroring the end BMC monopoly.


He shared that PEEPA is currently facilitating a processes that will birth a regulatory authority to predominately focus on the licensing of facility operators as well as ensure compliance with quality standards.  “At a local level we are still engaging stakeholders to asses if the regulatory authority needs to takeover licensing of butcheries from councils  or not , other options would be to just formulate a regulatory framework and still have council  byelaws as implementers and issuers of permits and licenses,” explained Moumakwa.


To protect the lucrative EU market which continues to be a key uptake stream for Botswana Beef, Moumakwa explained that independent facilities and abattoir operators will be licensed from minimum standards of EU market going upwards.  “This is because once beef leaves the country, it doesn’t matter where it’s going, if it experiences compliance and quality challenges at any market, news will find its way to EU, posing a serious threat to our relationship with them, they may within the blink of eye terminate out contract because this is a sensitive market that however we cannot afford to lose because it is a major revenue stream,” he said.


Moumakwa explained that the Beef Regulatory Authority will oversee safe and compliant importation of live animals. “We anticipate that after liberalisation of the industry and opening it up for other players the market will expand substantially, because beef uptake into these lucrative markets requires consistency of supply, so there will be increased demand of livestock, so we might find ourselves running short of live animals to slaughter if we don’t open our boarders for live import,” he said.


“The restructuring of Botswana Beef Industry will see the Maun Abattoir being wiped off from the BMC basket. With this particular abattoir we are looking at a long term concession with an operator who can take over and run the Maun facility in its capacity as a red zone abattoir.”
The Maun Abattoir was set-up to serve livestock keepers in the Foot and Mouth Disease redzone, so that they do not get tempted to smuggle their livestock into other zones for uptake by BMC export window.


For Lobatse and Francistown abattoirs, the PEEPA boss told WeekendPost that it recommends straight away privatisation.  “We are looking for anybody who can come and express interest to buy the  two facilities or partner with locals or any arrangement that interested parties may  find fit,” he said.  The Francistown abattoir is currently closed because of shortage supply of livestock to slaughter. Moumakwa explained that the final decision lies with government through acts of parliament and executive decision making bodies.


 “At the end of the day it is government who will decide on the structure and model following our recommendation,” he said. With Air Botswana PEEPA chief explained that the state owned airline is currently running four operations in house, being passage business, ground handling facilities, engineering and maintenance, as well as cargo services. “We want to unbundle it and asses these divisions separately and propose independent operations of these segments so they run efficiently,” he said.


He also revealed that bids will be dispatched towards the end of this year for independent players to come on board and invest in the maintenance and engineering services, ground handling facilities, as well as cargo and ultimately the passenger services. “We are completing a very detailed study that will fully inform us into restructuring this company and turn it into an efficient and profitable business,” said Moumakwa.

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