- 60 million litres fuel storage facility
- Will add 18 days import cover to Botswana ‘strategic storage capacity for liquid fuels
On 16 December 2023, His Honour Slumber Tsogwane who was holding the fort for His Excellency President Masisi, officially kick started the Ghanzi fuel storage facility, along the Chobokwane road, about 45 kilometres outside Ghanzi.
The project which will diversify Botswana’s fuel supply routes by taking advantage of the Namibian Walvis Bay port, ensuring energy security, is developed by state owned Botswana Oil Limited, fully funded by Government through the Ministry of Minerals & Energy.
When giving an overview of the project, Chief Executive Officer of Botswana Oil Limited, Mr Meshack Tshekedi explained that the development entails the construction of a 60 million litres bulk petroleum storage depot, administration offices, staff houses, access road, loading and offloading gantries, a tank farm and other associated infrastructure with an investment worth P1 billion.
The project is anticipated to be completed after 12 months with the minimum life expectancy of 50 years once the depot is operational. The facility is strategically located along the Trans Kalahari highway on the Mamumo Border route 45km of Ghanzi and 30km from Chobokwane. It is targeting the Western part of the country which contributes 10-30% of the total volume of fuel imported into Botswana.
Tshekedi underscored that the project was procured through an open tender in line with the Public Procurement Regulatory Authority (PPRA) requirements.
The project has been unbundled in to four (4) contracts so that some of the works could be reserved for citizen contractors being as follows:
Contract 1: Civil and Building Works – Reserved for 100 % citizen Contractors, awarded to Estate Construction––a 100% citizen owned company, at a contract value of P183million.This includes construction of the access road, storm water drainage and associated works. The construction will commence in January 2024 and is expected to be completed by September 2024.
Contract 2.1: Tanks fabrication and Erection Works: This package is currently at tender adjudication stage. Award is expected before the end of 2023 and construction will start in January 2024.
Tshekedi explained that this is a special scope therefore subcontracting to citizens was not mandatory due to specialised expertise required, however the contractors will be required to provide a preferential scheme which allowed bidders to subcontract the citizen contractors. The works should take 9 months and be completed by Dec 2024.
Contract 2.2: Electrical, Mechanical and Instrumentation Works. This is currently under Procurement which is expected to be concluded by March 2024 and the construction will take 9 months and expected to be completed by Dec 2024. Mandatory subcontracting to citizen contractors has been allowed at a minimum of 40% at the value of the works.
Provision of Services (Water and Power) – Drilling of boreholes completed for water to be used for the project was awarded to Citizen Contractor – Tlou Drilling. The power for the project will be sourced from Botswana Power Corporation.
The Botswana Oil Chief said the unbundling of the project and packaging it into four (4) contracts was meant to provide more opportunities for citizen companies to actively participate in auxiliary support services beyond the main contracts.
“These includes services such as transportation services, operation of truck staging facilities including maintenance of depots infrastructure, just to mention a few”
Tshekedi underscored Botswana Oil ‘ s commitment to successfully delivering the project on time and within budget.
“As Botswana Oil we commit to ensure that the project is completed on time. We will continuously engage with the Contractor and all relevant stakeholders for the success of the project.” he said.
When officially kick-starting the project Acting President Mr. Slumber Tsogwane said the project will enhance Botswana fuel availability, affordability, and reliability.
Tsogwane said Botswana is completely reliant on imports of refined petroleum products from neighbouring countries, mostly from South Africa.
This over-reliance on a single source and a single route he said poses a high risk to the security of fuel supply, as has been witnessed in the past when there was prolonged fuel supply shortage.
“The economic risk to our country’s sustainable development is compounded by the acutely limited fuel storage capacity, thus holding Botswana hostage”
Tsogwane explained that the construction of the Ghanzi Strategic Fuel Reserve is part of the unfolding fulfilment of two of the National Energy Policy objectives focused on creating additional fuel and lubricants storage capacity, while simultaneously diversifying the petroleum supply route, through using the Namibian port of Walvis-Bay, where Botswana has secured a dry-port facility, as part of the country’s vibrant bilateral relations with Namibia.
“Energy security is integral to sustainable economic development of any country. In this regard, Botswana Oil plays an important role in ensuring security of fuel supply and managing Government strategic reserves to safeguard against fuel shortages in the country.” Tsogwane said
He highlighted that the strategic storage capacity for liquid fuels stands at approximately 18 days of national consumption against the international standard for strategic storage capacity of 90 days.
Commercial buffer stock currently stands at less than 5 days of national consumption against the preferred minimum of 14 days’ cover.
The Vice President said with Ghanzi storage facility, the Government is seeking to reach this benchmark of 90 days, noting that at the completion of the project Botswana will have installed additional 18 days of storage capacity. Tsogwane revealed that the Government is investing about one billion Pula (P1,000,000,000) in this project.
For his part Minister of Minerals & Energy Honourable Lefoko Maxwell Moagi said energy security is key to achievement of Botswana’s national aspirations of high income economy by 2036.
Moagi urged all contractors who will be involved the project to exercise highest levels of patriotism by ensuring the project is completed on time and within the allocated budget.