UFISADI: The Making Of IPTL
UFISADI: The Making Of IPTL
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Naungana na Bubu.......kweli kabisa Dr. Mwakyembe na timu yake wapewe hiyo kazi......hili suala la IPTL....kweli linauma sana......linawafanya wasomi wetu waonekane incompetent wakati si kweli...............ni UNYANG'AU tu
kama hizo ripoti za uchunguzi zipo........je zina mapendekezo gani kuhusu kuchukuliwa hatua wahusika.......who cares............hata ikibidi JK kuachia ngazi poa tu
kama hizo ripoti za uchunguzi zipo........je zina mapendekezo gani kuhusu kuchukuliwa hatua wahusika.......who cares............hata ikibidi JK kuachia ngazi poa tu
Wamo wengi tu, inclunding Mzee Ruksa na Marehemu Kolimba.
BAK
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Ina maana hutaki tume zaidi iwachunguze mafisadi wanaoiangamiza nchi yetu kwa kuiingiza katika mikataba inayoifilisi bila manufaa yoyote kama huu wa IPTL waendelee kupeta tu?
BAK
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CANKERWORM OF OFFICIAL GRAFT: Probe establishes IPTL deal `lacked professional scrutiny`
THISDAY REPORTER
Dar es Salaam
AN independent investigation into the dubious Independent Power Tanzania Limited (IPTL) contract has established that the project suffered from a complete lack of professional scrutiny and was prone to corruption in high levels of government.
Apart from the involvement of bribery in the 20-year deal signed in 1995, the investigation by a Washington DC-based investigative consulting firm, Decision Strategies Fairfax International (DSFX), gathered overwhelming evidence suggesting that the integrity of high-level government decision-making processes was compromised.
US investigators working with their Tanzanian counterparts from the then Prevention of Corruption Bureau (PCB) gathered a trail of evidence revealing that the IPTL project was addressed and facilitated by certain government officials in a most unusual, secretive and out-of-channel fashion.
However, despite official statements made to authorities by several government officials revealing that they were offered huge bribes by IPTL operatives to approve the deal, there have so far been no criminal prosecutions of the alleged corruption -- more than a decade after the controversial project was signed.
Experts say the 100MW energy contract will continue to bleed Tanzanians of millions of US dollars until the agreement formally expires in 2015.
Following is a chronology of key events in the IPTL scandal, sourced from official government records seen by THISDAY:
Early 1992
Tanzania starts to experience extensive power rationing caused by a period of prolonged drought. The government reviews a number of proposals for an emergency solution to the crippling power cuts.
November 1994
Independent Power Tanzania Limited gives the government a proposal for medium-term power project. IPTL is a joint venture between Mechmar Corporation of Malaysia (70%) and VIP Engineering and Marketing Limited (30%), a local company owned by businessman James Rugemalira.
December 1994
Representatives of Mechmar visit Tanzania and hold talks with a government delegation comprising officials from the then Ministry of Water, Energy and Minerals, the Tanzania Electric Supply Company Limited (TANESCO) and the Attorney Generals Chambers.
January 1995
Ministry of Water, Energy and Minerals sends a draft Cabinet paper to the Inter-Ministerial Technical Committee (IMTC) in favour of the IPTL proposal. The IMTC rejects the draft paper on the ground that it was not supported by any financial or economic analysis. After the IMTCs decision, TANESCOs then Managing Director, Baruany Luhanga, commissions London Economics International, an independent economic consultancy firm, to assess the financial and economic implications of the proposed IPTL project. After a preliminary assessment, London Economics concluded that the terms of the agreement would be a huge burden to the Tanzania government and overly favour IPTL. The UK firm recommended that the terms of the contract should be analysed in greater detail before any agreement was finally reached.
May 3, 1995
Against expert advice, the Cabinet approves the signing of a power purchase agreement (PPA) and the implementation agreement (IA) with IPTL on the condition that the final electricity tariff in PPA should not be mentioned until after its economic committee had assessed the projects financial and economic implications.
May 26, 1995
TANESCOs Board of Directors approves the signing of the PPA after the power utilitys management informed the board that the Ministry of Water, Energy and Minerals (the parent ministry) had given authorization to sign the contract. The PPA was thereafter signed on the same day. A tariff of 10 US Cents per kilo-watt-hour (kwh) is one of the key terms of the PPA, which is abnormally high considering that TANESCOs tariff to consumers was less than 9 US cents per kwh. By signing the contract, TANESCO becomes contractually bound to buy power from IPTL at bloated rates for a period of 20 years.
July 16, 1996
The Ministry of Water, Energy and Minerals issues an electricity licence to IPTL with a condition that IPTL and TANESCO should agree on a tariff since the PPA as amended did not give a clear tariff calculation mechanism.
February 1997
IPTL signs an engineering, procurement and construction (EPC) contract with Stork-Wartsila NSD of the Netherlands. IPTL breaches the contract with TANESCO by installing medium-speed diesel (MSD) turbines instead of the slow-speed diesel (SSD) engines specified in the agreement. This was a direct departure from the terms of the PPA and TANESCO was not even notified by IPTL about this fundamental change.
September 1997
President Benjamin Mkapa issues instructions that the IPTL contract terms be renegotiated and orders the Ministry of Energy and Minerals to write to IPTL and express the governments concern over a range of matters, particularly irregularities in the negotiations, the approval process and the onerous terms in the agreement which benefited IPTL to the governments detriment.
October 13, 1997
The Cabinet approves that the IPTL project should proceed with the condition that the independent power company contractually binds itself to a tariff of 10 US cents. IPTL rejects this conditionality.
March 1998
TANESCO gets the governments approval to issue a notice of default to IPTL over the private companys unilateral decision to install diesel engines (turbines) with different specifications from those specified in the PPA. IPTL later files a suit in the High Court in Dar es Salaam seeking TANESCO to pay its monthly capacity and energy charge obligations under the agreements and succeeded in this action, which was later stayed pending the Court of Appeals determination over the matter. The matter later ends up for arbitration before the International Centre for the Settlement of Investment Disputes (ICSID) after IPTL failed to justify cost structure and payments.
February 2001
The London-based ISCID rules that IPTL was overpriced by $23.5m but that the contract still stands since TANESCO was aware of the switch from SSD to MSD.
2002 � present day
IPTLs local shareholder in Tanzania, VIP Engineering & Marketing Limited, files a petition at the High Court in Dar es Salaam to wind up IPTL. The case has been ordered to be referred to the London Court of International Arbitration (LCIA), which says it has jurisdiction over such claims.
Mechmars Executive Director and group financial controller, Loh Kiat Loon, dismisses the move, saying the court action was nothing more than an attempt by VIP Engineering to obtain a better valuation for their share of IPTL.
Meanwhile, the government has been forced to pay a staggering $30m (approx. 35bn/-) each year to IPTL, whose Malaysian owners now say they have no intention of selling the power plant to the government, as previously implied.
The current Ministry of Energy and Minerals is reluctant to answer any queries on the IPTL saga, referring queries to the Attorney Generals Chambers.
THISDAY REPORTER
Dar es Salaam
AN independent investigation into the dubious Independent Power Tanzania Limited (IPTL) contract has established that the project suffered from a complete lack of professional scrutiny and was prone to corruption in high levels of government.
Apart from the involvement of bribery in the 20-year deal signed in 1995, the investigation by a Washington DC-based investigative consulting firm, Decision Strategies Fairfax International (DSFX), gathered overwhelming evidence suggesting that the integrity of high-level government decision-making processes was compromised.
US investigators working with their Tanzanian counterparts from the then Prevention of Corruption Bureau (PCB) gathered a trail of evidence revealing that the IPTL project was addressed and facilitated by certain government officials in a most unusual, secretive and out-of-channel fashion.
However, despite official statements made to authorities by several government officials revealing that they were offered huge bribes by IPTL operatives to approve the deal, there have so far been no criminal prosecutions of the alleged corruption -- more than a decade after the controversial project was signed.
Experts say the 100MW energy contract will continue to bleed Tanzanians of millions of US dollars until the agreement formally expires in 2015.
Following is a chronology of key events in the IPTL scandal, sourced from official government records seen by THISDAY:
Early 1992
Tanzania starts to experience extensive power rationing caused by a period of prolonged drought. The government reviews a number of proposals for an emergency solution to the crippling power cuts.
November 1994
Independent Power Tanzania Limited gives the government a proposal for medium-term power project. IPTL is a joint venture between Mechmar Corporation of Malaysia (70%) and VIP Engineering and Marketing Limited (30%), a local company owned by businessman James Rugemalira.
December 1994
Representatives of Mechmar visit Tanzania and hold talks with a government delegation comprising officials from the then Ministry of Water, Energy and Minerals, the Tanzania Electric Supply Company Limited (TANESCO) and the Attorney Generals Chambers.
January 1995
Ministry of Water, Energy and Minerals sends a draft Cabinet paper to the Inter-Ministerial Technical Committee (IMTC) in favour of the IPTL proposal. The IMTC rejects the draft paper on the ground that it was not supported by any financial or economic analysis. After the IMTCs decision, TANESCOs then Managing Director, Baruany Luhanga, commissions London Economics International, an independent economic consultancy firm, to assess the financial and economic implications of the proposed IPTL project. After a preliminary assessment, London Economics concluded that the terms of the agreement would be a huge burden to the Tanzania government and overly favour IPTL. The UK firm recommended that the terms of the contract should be analysed in greater detail before any agreement was finally reached.
May 3, 1995
Against expert advice, the Cabinet approves the signing of a power purchase agreement (PPA) and the implementation agreement (IA) with IPTL on the condition that the final electricity tariff in PPA should not be mentioned until after its economic committee had assessed the projects financial and economic implications.
May 26, 1995
TANESCOs Board of Directors approves the signing of the PPA after the power utilitys management informed the board that the Ministry of Water, Energy and Minerals (the parent ministry) had given authorization to sign the contract. The PPA was thereafter signed on the same day. A tariff of 10 US Cents per kilo-watt-hour (kwh) is one of the key terms of the PPA, which is abnormally high considering that TANESCOs tariff to consumers was less than 9 US cents per kwh. By signing the contract, TANESCO becomes contractually bound to buy power from IPTL at bloated rates for a period of 20 years.
July 16, 1996
The Ministry of Water, Energy and Minerals issues an electricity licence to IPTL with a condition that IPTL and TANESCO should agree on a tariff since the PPA as amended did not give a clear tariff calculation mechanism.
February 1997
IPTL signs an engineering, procurement and construction (EPC) contract with Stork-Wartsila NSD of the Netherlands. IPTL breaches the contract with TANESCO by installing medium-speed diesel (MSD) turbines instead of the slow-speed diesel (SSD) engines specified in the agreement. This was a direct departure from the terms of the PPA and TANESCO was not even notified by IPTL about this fundamental change.
September 1997
President Benjamin Mkapa issues instructions that the IPTL contract terms be renegotiated and orders the Ministry of Energy and Minerals to write to IPTL and express the governments concern over a range of matters, particularly irregularities in the negotiations, the approval process and the onerous terms in the agreement which benefited IPTL to the governments detriment.
October 13, 1997
The Cabinet approves that the IPTL project should proceed with the condition that the independent power company contractually binds itself to a tariff of 10 US cents. IPTL rejects this conditionality.
March 1998
TANESCO gets the governments approval to issue a notice of default to IPTL over the private companys unilateral decision to install diesel engines (turbines) with different specifications from those specified in the PPA. IPTL later files a suit in the High Court in Dar es Salaam seeking TANESCO to pay its monthly capacity and energy charge obligations under the agreements and succeeded in this action, which was later stayed pending the Court of Appeals determination over the matter. The matter later ends up for arbitration before the International Centre for the Settlement of Investment Disputes (ICSID) after IPTL failed to justify cost structure and payments.
February 2001
The London-based ISCID rules that IPTL was overpriced by $23.5m but that the contract still stands since TANESCO was aware of the switch from SSD to MSD.
2002 � present day
IPTLs local shareholder in Tanzania, VIP Engineering & Marketing Limited, files a petition at the High Court in Dar es Salaam to wind up IPTL. The case has been ordered to be referred to the London Court of International Arbitration (LCIA), which says it has jurisdiction over such claims.
Mechmars Executive Director and group financial controller, Loh Kiat Loon, dismisses the move, saying the court action was nothing more than an attempt by VIP Engineering to obtain a better valuation for their share of IPTL.
Meanwhile, the government has been forced to pay a staggering $30m (approx. 35bn/-) each year to IPTL, whose Malaysian owners now say they have no intention of selling the power plant to the government, as previously implied.
The current Ministry of Energy and Minerals is reluctant to answer any queries on the IPTL saga, referring queries to the Attorney Generals Chambers.
BAK
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- Feb 11, 2007
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Revealed: How IPTL is ripping off Tanzanians: Ex-TANESCO boss: ``We were shut out of approval process...``
THISDAY REPORTER
Dar es Salaam
THE privately-owned Independent Power Tanzania Limited (IPTL) has been ripping off the government of well over 3bn/- a month by over billing payments for capacity charges, THISDAY can reveal today.
Apart from charging bloated electricity tariffs, IPTL is paid a staggering 3.67bn/- each month in capacity charges alone based on false premises.
A 2001 ruling by the London-based International Centre for the Settlement of Investment Disputes (ICSID) declared that the monthly capacity charges should be calculated on the basis of IPTLs equity (shareholders capital in the project) and other factors.
While IPTL claims that its equity was $86.54m, hence pushing up the monthly capacity charges to 3.67bn/-, it has now been revealed that the companys actual equity was a mere 50,000/- (fifty thousand shillings only).
This means that the owners of the 100-megawatt power plant located in the Tegeta suburb on the outskirts of Dar es Salaam, have been bleeding the government of billions of shillings each month through over billing on capacity charges.
IPTL was set up in 1994 as a joint venture between Mechmar Corporation of Malaysia (70%) and VIP Engineering and Marketing Limited, a local company (30%).
Well-placed sources say the state-run Tanzania Electric Supply Company Limited (TANESCO) has been aware of the over billing of capacity charges by IPTL for quite some time now.
The current Minister for Energy and Minerals, William Ngeleja, also recently admitted as much in Parliament.
A prominent local law firm, Mkono & Company advocates, has been giving legal advice to TANESCO and the Ministry of Energy and Minerals on its protracted dispute with IPTL.
TANESCOs legal wrangling with IPTL began in 1998, when the public utility issued a notice of default to the independent power company following its controversial decision to install diesel-fired power turbines with different specifications from those specified in the power purchase agreement (PPA).
Since then, the two sides have been locked in acrimonious discord over the actual cost of the project, which is the basis for calculating the capacity charge payments.
The government has been forced to bail out TANESCO repeatedly by contributing an average of 1.5bn/- each month towards IPTLs crippling capacity charges.
On the other hand, the 20-year PPA signed between IPTL and TANESCO in 1995, binds the public utility to buy electricity from the independent producer at a tariff of 10 US cents per kilo-watt-hour (kwh), which is abnormally high considering that TANESCOs own tariff to consumers was less than 9 US cents per kwh.
At one time, the government seriously contemplated buying the IPTL plant to do away with the huge burden of paying high capacity charges and power tariffs.
However, the Malaysian majority owners of the power plant, which earns them more than $30m each year whether it supplies power or not, have since refused to sell the company in anticipation of a huge windfall.
Government officials say the Attorney Generals chambers is currently dealing with the IPTL and will advise TANESCO and the Ministry of Energy and Minerals on appropriate steps to take against the over billing of capacity charges and other pertinent issues.
According to latest THISDAY findings, a previously-released report has revealed how high-ranking government officials exerted extraordinary pressure on TANESCO to sign the dubious 20-year contract with IPTL.
The report by a Washington DC-based investigative consulting firm, Decision Strategies Fairfax International (DSFX), which was commissioned by the government, contains statements from senior TANESCO officials describing how the IPTL deal was illegally pushed through by politicians, in a manner much similar to the present-day Richmond energy scandal.
The report quotes TANESCOs former managing director, Baruany Luhanga, as describing in a considerable detail how the power utility was forced by senior government officials to conduct negotiations with IPTL.
Luhanga outlined a top-down, highly-pressured atmosphere where TANESCO was shut out of the IPTL approval process because senior government officials in the then Ministry of Water, Energy and Minerals and elsewhere were pushing the process.
He told investigators from the US firm how TANESCO was remarkably never shown a copy of the 1994 Memorandum of Understanding (MoU) between Mechmar Corporation of Malaysia and the energy ministry until after the MoU was signed.
Luhanga noted that it was incredible that TANESCO was cut out of the MoU drafting process, as the MoU provided a fast track resolution to an existing power shortage by the utilization of an independent power producer, a concept foreign to Tanzania, says part of the January 1999 report, which has never been made public by the government.
According to Luhanga, such a huge $163.5m (approx. 190bn/-) project for the generation of 100MW of power necessarily required lengthy analysis and oversight by TANESCO -- none of which occurred in the IPTL negotiations.
The former TANESCO boss also told investigators how IPTL used the fast track provision incorporated in the MoU like a hammer to demand that TANESCO move things along quickly.
In fact, Mr Luhanga noted that when TANESCO did disagree with IPTL, it got pressure from high-level officials to work things out IPTLs way, says the report.
Luhanga also told investigators that the IPTL local director, James Rugemalira, enjoyed high access with senior government officials. He (Rugemalira) can see anybody that matters, he said according to the report.
It quotes Luhanga as saying Rugemalira was particularly close to the then finance minister, Daniel Yona, and providing specifics underpinning his (Luhangas) belief that Yona always does Rugemaliras bidding.
According to the report, Luhanga maintained that he believed corruption was central to the facilitation of IPTLs interests in the project.
Other senior TANESCO officials also pointed to high-level corruption in the IPTL contract.
The government is legally bound to the dubious IPTL deal until the year 2015. The IPTL agreement has been described by many experts as one of the worst contracts in the country�s history, bleeding the nation of millions of US dollars and condemning TANESCO to financial woes.
THISDAY REPORTER
Dar es Salaam
THE privately-owned Independent Power Tanzania Limited (IPTL) has been ripping off the government of well over 3bn/- a month by over billing payments for capacity charges, THISDAY can reveal today.
Apart from charging bloated electricity tariffs, IPTL is paid a staggering 3.67bn/- each month in capacity charges alone based on false premises.
A 2001 ruling by the London-based International Centre for the Settlement of Investment Disputes (ICSID) declared that the monthly capacity charges should be calculated on the basis of IPTLs equity (shareholders capital in the project) and other factors.
While IPTL claims that its equity was $86.54m, hence pushing up the monthly capacity charges to 3.67bn/-, it has now been revealed that the companys actual equity was a mere 50,000/- (fifty thousand shillings only).
This means that the owners of the 100-megawatt power plant located in the Tegeta suburb on the outskirts of Dar es Salaam, have been bleeding the government of billions of shillings each month through over billing on capacity charges.
IPTL was set up in 1994 as a joint venture between Mechmar Corporation of Malaysia (70%) and VIP Engineering and Marketing Limited, a local company (30%).
Well-placed sources say the state-run Tanzania Electric Supply Company Limited (TANESCO) has been aware of the over billing of capacity charges by IPTL for quite some time now.
The current Minister for Energy and Minerals, William Ngeleja, also recently admitted as much in Parliament.
A prominent local law firm, Mkono & Company advocates, has been giving legal advice to TANESCO and the Ministry of Energy and Minerals on its protracted dispute with IPTL.
TANESCOs legal wrangling with IPTL began in 1998, when the public utility issued a notice of default to the independent power company following its controversial decision to install diesel-fired power turbines with different specifications from those specified in the power purchase agreement (PPA).
Since then, the two sides have been locked in acrimonious discord over the actual cost of the project, which is the basis for calculating the capacity charge payments.
The government has been forced to bail out TANESCO repeatedly by contributing an average of 1.5bn/- each month towards IPTLs crippling capacity charges.
On the other hand, the 20-year PPA signed between IPTL and TANESCO in 1995, binds the public utility to buy electricity from the independent producer at a tariff of 10 US cents per kilo-watt-hour (kwh), which is abnormally high considering that TANESCOs own tariff to consumers was less than 9 US cents per kwh.
At one time, the government seriously contemplated buying the IPTL plant to do away with the huge burden of paying high capacity charges and power tariffs.
However, the Malaysian majority owners of the power plant, which earns them more than $30m each year whether it supplies power or not, have since refused to sell the company in anticipation of a huge windfall.
Government officials say the Attorney Generals chambers is currently dealing with the IPTL and will advise TANESCO and the Ministry of Energy and Minerals on appropriate steps to take against the over billing of capacity charges and other pertinent issues.
According to latest THISDAY findings, a previously-released report has revealed how high-ranking government officials exerted extraordinary pressure on TANESCO to sign the dubious 20-year contract with IPTL.
The report by a Washington DC-based investigative consulting firm, Decision Strategies Fairfax International (DSFX), which was commissioned by the government, contains statements from senior TANESCO officials describing how the IPTL deal was illegally pushed through by politicians, in a manner much similar to the present-day Richmond energy scandal.
The report quotes TANESCOs former managing director, Baruany Luhanga, as describing in a considerable detail how the power utility was forced by senior government officials to conduct negotiations with IPTL.
Luhanga outlined a top-down, highly-pressured atmosphere where TANESCO was shut out of the IPTL approval process because senior government officials in the then Ministry of Water, Energy and Minerals and elsewhere were pushing the process.
He told investigators from the US firm how TANESCO was remarkably never shown a copy of the 1994 Memorandum of Understanding (MoU) between Mechmar Corporation of Malaysia and the energy ministry until after the MoU was signed.
Luhanga noted that it was incredible that TANESCO was cut out of the MoU drafting process, as the MoU provided a fast track resolution to an existing power shortage by the utilization of an independent power producer, a concept foreign to Tanzania, says part of the January 1999 report, which has never been made public by the government.
According to Luhanga, such a huge $163.5m (approx. 190bn/-) project for the generation of 100MW of power necessarily required lengthy analysis and oversight by TANESCO -- none of which occurred in the IPTL negotiations.
The former TANESCO boss also told investigators how IPTL used the fast track provision incorporated in the MoU like a hammer to demand that TANESCO move things along quickly.
In fact, Mr Luhanga noted that when TANESCO did disagree with IPTL, it got pressure from high-level officials to work things out IPTLs way, says the report.
Luhanga also told investigators that the IPTL local director, James Rugemalira, enjoyed high access with senior government officials. He (Rugemalira) can see anybody that matters, he said according to the report.
It quotes Luhanga as saying Rugemalira was particularly close to the then finance minister, Daniel Yona, and providing specifics underpinning his (Luhangas) belief that Yona always does Rugemaliras bidding.
According to the report, Luhanga maintained that he believed corruption was central to the facilitation of IPTLs interests in the project.
Other senior TANESCO officials also pointed to high-level corruption in the IPTL contract.
The government is legally bound to the dubious IPTL deal until the year 2015. The IPTL agreement has been described by many experts as one of the worst contracts in the country�s history, bleeding the nation of millions of US dollars and condemning TANESCO to financial woes.
Humble Servant
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Wavivu si ngumu kuwatambua.........
BAK
JF-Expert Member
- Feb 11, 2007
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Mwandosya report slams IPTL deal
THISDAY REPORTER
Dar es Salaam
A SCATHING report by senior Cabinet Minister, Prof. Mark Mwandosya, has firmly castigated the Independent Power Tanzania Limited (IPTL) contract, saying the entire deal smacked of corruption.
According to the report, there was absolutely no competition when the government addressed the countrys energy crisis in the mid-1990s, paving the way for the awarding of the 100MW power generation contract to IPTL.
The Malaysians just came in and used the top-down approach and got IPTL approved. Thats it, says part of the comprehensive, 10-year-old report, which has never been made public.
IPTL was set up in 1994 as a joint venture between Mechmar Corporation of Malaysia (70%) and VIP Engineering and Marketing Limited, a local company (30%), whose director was prominent local businessman James Rugemalira.
The report was compiled in January 1998, when Prof. Mwandosya was serving as chairman and director of the Dar es Salaam-based Centre for Energy, Environment, Science and Technology (CEEST).
Mwandosya, at that time a former permanent secretary in the Ministry of Water, Energy and Minerals, had been commissioned by State House in 1997 during President Benjamin Mkapas administration to conduct an appraisal of the power sector situation in Tanzania.
In his report preparation, Mwandosya - who is currently Minister for Water and Irrigation in President Jakaya Kikwete�s government - was assisted by more than 20 government and private sector experts in the countrys power sector.
The report says that IPTL was created from next to nothing and Rugemalira (the projects promoter) has no understanding whatsoever of a kilowatt...but he did see an opportunity to make big money.
According to the report, IPTL could not have gone forward without facilitation (bribes).
A Washington DC-based investigative consulting firm, Decision Strategies Fairfax International (DSFX), quotes excerpts of the Mwandosya report, saying: The professor (Mwandosya) also believes that other government officials, especially at the ministerial level, are not na�ve...just dishonest.
The DSFX firm, which was commissioned by the government to review the IPTL project, says multiple sources of known reliability within Tanzania had confidentially furnished specific details regarding bribes received by senior government officials, including Cabinet ministers, in favour of the IPTL deal.
Well-placed sources in government say both the Mwandosya report and a subsequent report compiled by DSFX investigators were largely ignored by the third phase government of ex-president Mkapa.
In 1995, the state-run Tanzania Electric Supply Company Limited (TANESCO) commissioned London Economics International, an independent economic consultancy firm, to assess the financial and economic implications of the proposed IPTL project.
After a preliminary assessment, London Economics International concluded that the terms of the agreement would be a huge burden to the Tanzanian government and overly favour private owners of IPTL.
The UK firm recommended that the terms of the contract should be analysed in greater detail before any agreement was finally reached.
However, despite all these reports advising the government against the IPTL contract, TANESCO was reportedly forced by senior government officials to sign the hugely controversial 20-year contract with IPTL.
This means that TANESCO will be forced to continue haemorrhaging money as a direct consequence of the dubious IPTL deal until 2015, through bloated capacity charges and energy tariffs.
The power utility has in turn been inclined to pass the IPTL financial burden onto consumers in terms of frequent power tariffs hikes.
THISDAY REPORTER
Dar es Salaam
A SCATHING report by senior Cabinet Minister, Prof. Mark Mwandosya, has firmly castigated the Independent Power Tanzania Limited (IPTL) contract, saying the entire deal smacked of corruption.
According to the report, there was absolutely no competition when the government addressed the countrys energy crisis in the mid-1990s, paving the way for the awarding of the 100MW power generation contract to IPTL.
The Malaysians just came in and used the top-down approach and got IPTL approved. Thats it, says part of the comprehensive, 10-year-old report, which has never been made public.
IPTL was set up in 1994 as a joint venture between Mechmar Corporation of Malaysia (70%) and VIP Engineering and Marketing Limited, a local company (30%), whose director was prominent local businessman James Rugemalira.
The report was compiled in January 1998, when Prof. Mwandosya was serving as chairman and director of the Dar es Salaam-based Centre for Energy, Environment, Science and Technology (CEEST).
Mwandosya, at that time a former permanent secretary in the Ministry of Water, Energy and Minerals, had been commissioned by State House in 1997 during President Benjamin Mkapas administration to conduct an appraisal of the power sector situation in Tanzania.
In his report preparation, Mwandosya - who is currently Minister for Water and Irrigation in President Jakaya Kikwete�s government - was assisted by more than 20 government and private sector experts in the countrys power sector.
The report says that IPTL was created from next to nothing and Rugemalira (the projects promoter) has no understanding whatsoever of a kilowatt...but he did see an opportunity to make big money.
According to the report, IPTL could not have gone forward without facilitation (bribes).
A Washington DC-based investigative consulting firm, Decision Strategies Fairfax International (DSFX), quotes excerpts of the Mwandosya report, saying: The professor (Mwandosya) also believes that other government officials, especially at the ministerial level, are not na�ve...just dishonest.
The DSFX firm, which was commissioned by the government to review the IPTL project, says multiple sources of known reliability within Tanzania had confidentially furnished specific details regarding bribes received by senior government officials, including Cabinet ministers, in favour of the IPTL deal.
Well-placed sources in government say both the Mwandosya report and a subsequent report compiled by DSFX investigators were largely ignored by the third phase government of ex-president Mkapa.
In 1995, the state-run Tanzania Electric Supply Company Limited (TANESCO) commissioned London Economics International, an independent economic consultancy firm, to assess the financial and economic implications of the proposed IPTL project.
After a preliminary assessment, London Economics International concluded that the terms of the agreement would be a huge burden to the Tanzanian government and overly favour private owners of IPTL.
The UK firm recommended that the terms of the contract should be analysed in greater detail before any agreement was finally reached.
However, despite all these reports advising the government against the IPTL contract, TANESCO was reportedly forced by senior government officials to sign the hugely controversial 20-year contract with IPTL.
This means that TANESCO will be forced to continue haemorrhaging money as a direct consequence of the dubious IPTL deal until 2015, through bloated capacity charges and energy tariffs.
The power utility has in turn been inclined to pass the IPTL financial burden onto consumers in terms of frequent power tariffs hikes.
Nsaji Mpoki
JF-Expert Member
- Nov 5, 2007
- 396
- 68
Bubu heshima mbele mkuu,nafikri hii kitu sasa kuna haja bunge kujadili mikataba hii.Ni ukweli kuwa na nishati reliable na nafuu ni kitu cha msingi katika kujenga uchumi imara.Kumetokea tatizo sasa umeme unakatika mara kwa mara ,licha ya kwamba ni aghali sana.Matokeo yake gharama za uzalishaji kuwa kubwa na kushindwa kushindana kibiashara.
Tukubali kwanza tuna tatizo na suala zima la nishati,baada tubaini nini chanzo cha tatizo hili sugu na mwishoni tuchukue maamuzi ya kurekebisha tatizo hili.
Halisi
JF-Expert Member
- Jan 16, 2007
- 2,802
- 614
Na wahusika wanaendelea kupeta, wengine wakiendelea kutufisadi
Kwa kweli hili suala lina sikitisha kwa kuwa lina negative aspects nyingi
1. kudumaza utaalamu wetu.
2 kuna wizi uliofanywa na wanasiasa.
3. inaua uchumi, maana umeme wetu unakuwa ghali kwa shighuli za uzalishaji viwandani na majumbani
4 ina dumaza maendeleo ya sector ya umeme, maana hizo pesa zingeweza kuwekezwa kwenye miradi mingine ya umeme eg vijijini na kukuza uzalishaji na elimu, etc
1. kudumaza utaalamu wetu.
2 kuna wizi uliofanywa na wanasiasa.
3. inaua uchumi, maana umeme wetu unakuwa ghali kwa shighuli za uzalishaji viwandani na majumbani
4 ina dumaza maendeleo ya sector ya umeme, maana hizo pesa zingeweza kuwekezwa kwenye miradi mingine ya umeme eg vijijini na kukuza uzalishaji na elimu, etc
....august.......yaani TANESCO bado inakula hasara ya mabilioni pamoja na kupandisha bei ya umeme kwa wateja wake............just imagine ni nani ana-fill hil gap la uchumi......ofcourse inarudi kwetu sisi wananchi kama ulivyoainisha hapo juu............halafu eti akina Rugemarila na wenzake wanaendelea kupeta..............
......uki-evaluate ni huduma ngapi muhimu tunazikosa kwa ajili ya huu UPUMBAVU.......i can't wait to s**** somebody.......damn!!
LazyDog
JF-Expert Member
- Apr 10, 2008
- 2,473
- 199
Halafu sasa hivi serikali ina ukata wa hali ya juu. Watu wanaofanya serikalini wanasema hawakumbuki kuona upungufu wa fedha kama hiki kipindi cha JK. Kama unashangaa Polisi kukosa karatasi nenda kwenye mawizara.
Nasikia vyuo vimeambiwa vitafute fedha kwenye vyanzo vingine. Vyuo sasa vinaendelea kuzuia kuonyesha matokeo mpaka mwanafunzi atakapoleta ada. No registration if you don't bring cash this school year.
Mkapa walau alikusanya, Kikwete anatapanya tu!
Ikifika 2010....
2017 tutakuwa tunasimuliana (wale watakaobahatika kuwepo, maana...).
.
Nasikia vyuo vimeambiwa vitafute fedha kwenye vyanzo vingine. Vyuo sasa vinaendelea kuzuia kuonyesha matokeo mpaka mwanafunzi atakapoleta ada. No registration if you don't bring cash this school year.
Mkapa walau alikusanya, Kikwete anatapanya tu!
Ikifika 2010....
2017 tutakuwa tunasimuliana (wale watakaobahatika kuwepo, maana...).
.
BAK
JF-Expert Member
- Feb 11, 2007
- 124,790
- 288,165
Bunge watchdog team reviews IPTL problem: Set to query govt delay in purchasing Tegeta plant
SEBASTIAN MRINDOKO
Dar es Salaam
A BUNGE watchdog committee has begun an official review of the hugely controversial Independent Power Tanzania Limited (IPTL) deal, which has tied the country to a dubious, long-term payment contract until the year 2015.
Members of the powerful parliamentary energy and minerals committee that exposed the infamous Richmond scandal in the National Assembly, leading to the formation of the probe team chaired by Dr Harrison Mwakyembe, will prepare a report of their findings for submission in the House.
The committee's chairman, William Shellukindo, told THISDAY in an exclusive interview yesterday that the team will also seek explanations from the Minister for Energy and Minerals, WIlliam Ngeleja, on what has delayed plans by the government to purchase the IPTL plant and machinery in the city.
It has already been officially acknowledged that an outright purchase of the privately-owned, 100MW thermal power plant located at Tegeta on the outskirts of the city is the best available option for avoiding the crippling capacity charges and power tariffs stipulated in the dubious contract signed in 1995.
The IPTL project, which is supposed to last 20 years, is understood to be currently bleeding the government and the state-run Tanzania Electric Supply Company Limited (TANESCO) a staggering 3.67bn/- each month in capacity charges alone, based on false premises.
The Malaysia-registered private energy company has also been charging TANESCO exorbitant power tariffs, well beyond what the public utility actually charges its customers.
Shellukindo told THISDAY that members of the energy and minerals committee toured the IPTL plant last week and encountered some unanswered questions.
''We need to first meet with the energy and minerals minister, who will have to give us explanations on a number of key queries, including the delay in the purchase of IPTL,'' said the Bumbuli legislator on a CCM ticket.
He said after talking to the minister and doing its own research, the committee will then compile a report for presentation in the upcoming parliamentary sessions, complete with appropriate recommendations for the government regarding the IPTL deal.
According to Shellukindo, if there is not enough time for the report to be tabled in next month's (November) parliamentary session, it will be tabled in the February session next year.
Asked if his committee intends to recommend the formation of another special Bunge probe team into the IPTL affair - similar to the Richmond investigation - he said there was no immediate need for that since ''the underlying problems with the IPTL contract are well-documented and understood.''
However, he said the government is currently faced with three distinct options with regards to the IPTL contract - to purchase the power plant, to terminate the contract, or to continue paying inflated capacity and energy charges until the contract expires in 2015.
Shellukindo revealed that his committee is leaning towards the option of the government purchasing the power plant, which he said is the cheaper and least complicated alternative.
He said the government, through advice from experts, will have to make a choice between the three options and reach a decision that should end or significantly reduce the IPTL problem.
Shellukindo noted that experience has shown it is difficult for the government to agree on important matters with IPTL because its owners are in Malaysia.
''The (IPTL) local management can't make any important decisions that can affect the whole firm because they are only employees, whereas the company's board of directors that can make the important decisions is abroad,'' he said.
For example, Shellukindo said, the local IPTL management could not immediately give the committee any answers when asked about the possible conversion of the plant's diesel power turbines into gas-powered generators to reduce running costs.
''These are some of the important decisions that need to be made,'' he explained.
IPTL's Malaysian owners declared last year that they had no intention of selling out to the government, as previously implied.
Instead, the IPTL owners are expecting a huge windfall of up to $150m (approx. 180bn/-) in total earnings out of the project, after settling loan repayment obligations in the next three years or so.
According to media reports from Malaysia, rumours were rife as recently as March last year that Mechmar Corporation Bhd was ready to sell its majority 70 per cent shares in IPTL to the Tanzanian government, in order to settle outstanding loan defaults.
However, a Malaysian publication, The Edge, reported last year that the Mechmar management has changed its mind about this, thanks to the company's fortunes experiencing an apparent up-turn for the better.
''We are not contemplating a buyer (for our IPTL shares) any more,'' Mechmar's executive director and group financial controller, Loh Kiat Loon, was quoted as saying.
He said after a 'difficult' five years and some asset sales, business and cash flow were finally picking up for the group. But he also suggested that the IPTL project, being the most lucrative of Mechmar's ventures, still invited speculation of possible divestiture.
The Edge quoted Mechmar officials as saying that the IPTL project has a $90m (approx. 108bn/-) loan outstanding, which enjoys priority settlement over others within the Mechmar group.
''The net cash of $30m a year which it gets from selling power to the Tanzanian electric company (TANESCO) is ring-fenced to service this loan,'' they said.
According to Mechmar officials, delayed commissioning of the independent power producer coupled with the shock of the Asian financial crisis combined to pull the plug on the company, causing it to default on its loans.
But according to statements attributed to Loh, this period of belt-tightening ''may soon be over as repayment of the IPTL loan has another three years to go under the current schedule.''
''Once we're done, we want to reap the gains from this (IPTL) project...it's not worth our effort to look for a buyer,'' the Mechmar executive director and group financial controller was quoted as saying.
In 2002, IPTL's local shareholder in Tanzania, VIP Engineering & Marketing Limited, filed a petition to wind up IPTL at the High Court in Dar es Salaam. The case has been ordered to be referred to the London Court of International Arbitration (LCIA), which says it has jurisdiction over such claims.
According to the Mechmar boss Loh, the move by VIP Engineering is nothing more than an attempt by its shareholders to obtain a ''better valuation for their share'' of IPTL.
SEBASTIAN MRINDOKO
Dar es Salaam
A BUNGE watchdog committee has begun an official review of the hugely controversial Independent Power Tanzania Limited (IPTL) deal, which has tied the country to a dubious, long-term payment contract until the year 2015.
Members of the powerful parliamentary energy and minerals committee that exposed the infamous Richmond scandal in the National Assembly, leading to the formation of the probe team chaired by Dr Harrison Mwakyembe, will prepare a report of their findings for submission in the House.
The committee's chairman, William Shellukindo, told THISDAY in an exclusive interview yesterday that the team will also seek explanations from the Minister for Energy and Minerals, WIlliam Ngeleja, on what has delayed plans by the government to purchase the IPTL plant and machinery in the city.
It has already been officially acknowledged that an outright purchase of the privately-owned, 100MW thermal power plant located at Tegeta on the outskirts of the city is the best available option for avoiding the crippling capacity charges and power tariffs stipulated in the dubious contract signed in 1995.
The IPTL project, which is supposed to last 20 years, is understood to be currently bleeding the government and the state-run Tanzania Electric Supply Company Limited (TANESCO) a staggering 3.67bn/- each month in capacity charges alone, based on false premises.
The Malaysia-registered private energy company has also been charging TANESCO exorbitant power tariffs, well beyond what the public utility actually charges its customers.
Shellukindo told THISDAY that members of the energy and minerals committee toured the IPTL plant last week and encountered some unanswered questions.
''We need to first meet with the energy and minerals minister, who will have to give us explanations on a number of key queries, including the delay in the purchase of IPTL,'' said the Bumbuli legislator on a CCM ticket.
He said after talking to the minister and doing its own research, the committee will then compile a report for presentation in the upcoming parliamentary sessions, complete with appropriate recommendations for the government regarding the IPTL deal.
According to Shellukindo, if there is not enough time for the report to be tabled in next month's (November) parliamentary session, it will be tabled in the February session next year.
Asked if his committee intends to recommend the formation of another special Bunge probe team into the IPTL affair - similar to the Richmond investigation - he said there was no immediate need for that since ''the underlying problems with the IPTL contract are well-documented and understood.''
However, he said the government is currently faced with three distinct options with regards to the IPTL contract - to purchase the power plant, to terminate the contract, or to continue paying inflated capacity and energy charges until the contract expires in 2015.
Shellukindo revealed that his committee is leaning towards the option of the government purchasing the power plant, which he said is the cheaper and least complicated alternative.
He said the government, through advice from experts, will have to make a choice between the three options and reach a decision that should end or significantly reduce the IPTL problem.
Shellukindo noted that experience has shown it is difficult for the government to agree on important matters with IPTL because its owners are in Malaysia.
''The (IPTL) local management can't make any important decisions that can affect the whole firm because they are only employees, whereas the company's board of directors that can make the important decisions is abroad,'' he said.
For example, Shellukindo said, the local IPTL management could not immediately give the committee any answers when asked about the possible conversion of the plant's diesel power turbines into gas-powered generators to reduce running costs.
''These are some of the important decisions that need to be made,'' he explained.
IPTL's Malaysian owners declared last year that they had no intention of selling out to the government, as previously implied.
Instead, the IPTL owners are expecting a huge windfall of up to $150m (approx. 180bn/-) in total earnings out of the project, after settling loan repayment obligations in the next three years or so.
According to media reports from Malaysia, rumours were rife as recently as March last year that Mechmar Corporation Bhd was ready to sell its majority 70 per cent shares in IPTL to the Tanzanian government, in order to settle outstanding loan defaults.
However, a Malaysian publication, The Edge, reported last year that the Mechmar management has changed its mind about this, thanks to the company's fortunes experiencing an apparent up-turn for the better.
''We are not contemplating a buyer (for our IPTL shares) any more,'' Mechmar's executive director and group financial controller, Loh Kiat Loon, was quoted as saying.
He said after a 'difficult' five years and some asset sales, business and cash flow were finally picking up for the group. But he also suggested that the IPTL project, being the most lucrative of Mechmar's ventures, still invited speculation of possible divestiture.
The Edge quoted Mechmar officials as saying that the IPTL project has a $90m (approx. 108bn/-) loan outstanding, which enjoys priority settlement over others within the Mechmar group.
''The net cash of $30m a year which it gets from selling power to the Tanzanian electric company (TANESCO) is ring-fenced to service this loan,'' they said.
According to Mechmar officials, delayed commissioning of the independent power producer coupled with the shock of the Asian financial crisis combined to pull the plug on the company, causing it to default on its loans.
But according to statements attributed to Loh, this period of belt-tightening ''may soon be over as repayment of the IPTL loan has another three years to go under the current schedule.''
''Once we're done, we want to reap the gains from this (IPTL) project...it's not worth our effort to look for a buyer,'' the Mechmar executive director and group financial controller was quoted as saying.
In 2002, IPTL's local shareholder in Tanzania, VIP Engineering & Marketing Limited, filed a petition to wind up IPTL at the High Court in Dar es Salaam. The case has been ordered to be referred to the London Court of International Arbitration (LCIA), which says it has jurisdiction over such claims.
According to the Mechmar boss Loh, the move by VIP Engineering is nothing more than an attempt by its shareholders to obtain a ''better valuation for their share'' of IPTL.