Thursday, January 12, 2017

Questions over govt, Tanesco tariffs fallout


Dar es Salaam. The Government decision to quash new electricity tariffs announced by the Energy and Water Utilities Regulatory Authority (Ewura) and the subsequent sacking Tanesco’s managing director has raised questions over the respect of the rule of law and protection of public servant’s rights.

Concern has been expressed over the manner authorities responded to the Ewura announcement, with observers pointing serious violation of fundamental laws, rules and procedures.The move has also seen at least three Tanesco top managers demoted.

Pundits are warning that the developments not only will instill fear and rob regulatory bodies of their legal mandate to decide independently but were a threat to the operations of the state power utility. Ewura announced on December 30 last year an 8.5 per cent rise in power tariffs but in unprecedented move Energy and Minerals minister Prof Sospeter Muhongo revoked the following day.

Quoting the Electricity Act, Prof Muhongo wrote to direct Ewura director general Mr Felix Ngamlagosi to stop utilization of new tariff structure till when the government carefully and thoroughly consider a formal report from Ewura.

Prof Muhongo later said in a news bulletin that he was not notified on the new tariffs, saying Tanesco and Ewura should not deflect their real problems by raising power charges.

Prof Muhongo’s order was cemented by President Magufuli who publicly opposed the power tariff adjustment and praised the minister for suspending the tariffs.

Speaking at Mater Misericordiae Cathedral in Bukoba, President Magufuli expressed disappointment that the decision was reached without him, the Vice President, the Prime Minister or minister responsible for energy being consulted.

He said it was not acceptable that while the government is pushing hard for industrialization and ensure power is accessible to the poor in villages, one person used his position to arbitrarily raise power tariffs.

Questions now abound as to what legal powers the minister applied to quash the tariff order which Ewura has been issuing for the past ten years.

Section 4 of the Electricity Act confines powers of the energy minister to provide supervisory and oversight and develop and review government policies in the electricity supply industry.

But section 23 of the Act gives Ewura exclusive powers to regulate tariff for the sale of electricity.

“Minister Muhongo cited the Electricity Act to suspend the tariff order but skipped citing the specific section that gives him powers to suspend a legal tariff order. The section simply doesn’t exist,” a source with experience in the energy sector told The Citizen.

Government is also blamed for resorting to suspend legally approved tariffs against requirement of the law which has set mechanism of disputing such orders.

According to section 43 (1) of the Electricity Act, any party aggrieved by Ewura decision may appeal to the Fair Competition Tribunal for redress.

Government participation

Although Prof Muhongo blame Ewura for announcing the suspended tariffs without consulting him, credible evidence show that government was adequately involved in the tariff review process.

The Citizen has learnt that on November 18 last year, Ewura invited top officials in the energy ministry

to attend public hearing meetings on the application scheduled in Dar es Salaam.

Reports further shows that following  the closure of public inquiry process, Ewura embarked on detailed

evaluation of the tariff application and upon completion communicated the Draft Order to all stakeholders.

Inquiry shows that the ministry of Energy and Minerals was made aware of the Draft Order on 19th December last year.

Government, as a key stakeholder, was also made aware of developments coming out of the tariff review process through its representatives in the Government Consultative Council (GCC).

The GCC, whose aim is to ensure that the voice of the government as a key stakeholder in the process is

considered before the final Draft Order is issued, draw members from the Ministry of Energy and Minerals, the Attorney General Chambers, Finance ministry, ministry of Trade and Industry.

The GCC ensures government’s full participation in determination of the application and it views are considered before the final order is issued.

Sources within the energy ministry confided to The Citizen that the draft tariff adjustment order was presented to the ministry during an exit meeting of which a government representative from the ministry attended and gave government opinion on it.

Acting assistant commissioner for energy development, Eng. Juma Mkobya attended and represented the ministry of Energy and Minerals and did not raise any objection to the Draft Tariff Order.

“It is with disappointment and regret that we are now informed that the Ministry of Energy and Minerals is not aware of and was never informed of any events that took place in the review of Tanesco tariffapplication,” says Ewura Director General Felix Ngamlagosi in a letter sent to the PS for Energy and Minerals and which was seen by The Citizen.

Who can appoint, sack Tanesco CEO? Mramba’s sacking also raises questions of who between the President and Tanesco’s board of directors has the powers to hire and fire the agency’s top management.

Going by the Public Corporations Act, 1992, the board of directors enjoys the powers to appoint chief executive officer of a public corporation like Tanesco.

Section 13 (1) of the Act say “where the government is the sole shareholder in a public corporation, the board of directors shall, with prior consent of the minister responsible for the parent ministry, appoint the chief executive of such public corporation.”

Former president Benjamin Mkapa had to revoke the appointment of then Tanesco boss Baruany Luhanga who was wrongly appointment before Tanesco management was taken over by Net Group Solutions of South Africa. The board would later appoint the MD for Net Group Solutions.

The succeeding Tanesco MDs---Dr Idris Rashid and William Mhando were appointed and removed by the

board. This means that in practice and law, the authority to hire and fire lies with the board.

Tanesco followed suit and announced it had demoted deputy managing director (transmission)

Decklan Mhaiki, Deputy managing director (distribution) Ms Sophia Mgonja and deputy managing director (generation) Mr Nazir Kachwamba who have all been transferred to Tanesco Training School.

“A public servant cannot just be demoted like that. Procedurally, a disciplinary hearing should have been conducted and charge against them be proved before an independent committee before the final decision is made. So what has happened at Tanesco is unlawful,” said a source at the ministry.

“All these developments tells us our leaders have abandoned the fundamentals of the rule of law and reneged on their vows to safeguard the constitution,” a retired senior civil servant explained. She wished to remain anonymous over the sensitivity of the matter.

When contacted, Tanesco board chairman Dr Alex Kyaruzi neither admitted nor denied that only the board has powers to appoint and remove chief executive officer of the power company.

He however told The Citizen that the president has powers to appoint and fire.

“He (the president) has powers to sack. He is the one who appointed him. Former President Kikwete appointed Mramba to the position.

The rule is that he who appoints is the one who fires,” he explained in a telephone interview.

Asked for comment on Mramba’s sacking for presenting the tariff increase application which was blessed by the board, Mr Kyaruzi declined direct comment, saying: “ “Board’sdecision are confidential. Whatever we decide are for internal use until we decide otherwise.”

Concerning alleged demotion of Tanesco top managers, Dr Kyaruzi insisted he cannot discuss with the media such decisions.

Trade Union Confederation of Tanzania (Tucta) president told The Citizen that although they do not know yet how the decision to fire or demote Tanesco managers, the union was concerned about the apparent wave of punishing civil servants in that fashion,” he said.