State gets ultimatum on Tanesco debt

Dodoma. The Parliamentary Public Accounts Committee (PAC) has given the government a six-month ultimatum to pay a Sh125 billion debt it owes Tanzania Electric Supply Company (Tanesco).

According to the Tanesco Managing Director, Mr Felchesmi Mramba, Zanzibar alone, through Zanzibar Electricity Corporation (Zeco) has a debt amounting to Sh85 billion, accumulated over a period of three years—since 2013—while institutions under the Union Government owe the power utility firm Sh40 billion.

“We really need urgent assistance in collecting the debts, especially the Zanzibar one, which is so huge and still growing,” said Mr Mramba before the committee on Wednesday evening.

The PAC chairperson and Same East MP (Chadema), Ms Naghenjwa Kaboyoka, asked the Tanesco management if it had taken any initiative to recover the money, especially from Zanzibar, including threatening to cut off the supply.

Mr Mramba said Tanesco had issued the threat sometimes back, but the matter was then taken over by the government.

“It was discussed between the Union and the Isles governments as a Union matter; two meetings have been held and the latest information we have is that Zeco has asked the Government of Zanzibar to settle its debt and we are hopeful something will happen soon.”

Mwanakwerekwe MP (CUF) Ali Salim Khamis asked Tanesco what reason the Zanzibar government has been giving for the massive default and Mr Mramba responded:

“The reason is tariff difference, Zeco is charging lower tariffs compared to Tanesco and that means it is collecting less than we charge them. Tanesco tariffs are set by Energy and Water Utilities Regulatory Authority (Ewura); in the Isles, Zanzibar Utilities Regulatory Authority (Zura) has been established and it will be setting tariffs there.”

Treasury Registrar Lawrence Mafuru told the committee that indeed, Tanesco was doing all that it can to collect debts, adding that the Zanzibar debt is already on President John Magufuli’s desk.

“I personally participated in the submission of the debt report to the highest level of decision making in the country, and I strongly believe that the issue will be resolved soon, and those who aren’t going to clear their debts will face power cut-offs.”

“The committee hereby directs the government to make sure that all the debts are cleared within six months,’’ ruled Ms Kaboyoka, adding:

“It is high time the government left Tanesco to operate as a business enterprise; it doesn’t make sense to hike electricity bills for ordinary wananchi while government institutions are accumulating huge debts.”

Morogoro South-East MP Omary Mgumba asked Tanesco to outline strategies they are employing to ensure the debts aren’t accumulating any further. According to Mr Mramba, to date, the power utility firm has installed Luku (pre-payment) meters for about 96 per cent of their customers, including the Police Force, Prisons and Tanzania People’s Defence Forces (TPDF).

“We are going to finish up with the remaining 4 per cent by next April. We want to do away with post-paid services so that all electricity subscribers will be using Luku meters.”

In another development Sikonge MP Joseph Kakunda pointed out irregularities in the procurement process revealed in the ‘CAG Report for the Financial Year 2014/2015’ and asked Tanesco officials to state what measures they have put in place to forestall a repeat.

According to Mr Mramba, Tanesco made a reshuffle in the Procurement Department, noting that more than 50 per cent of the current employees there are new. He added that the department was restructured to establish four new sub-sections.

They include Major Projects and Consultancy, Equipment distribution, Generation and Transmission and General Procurement sub- sections. “After these changes, we have recorded a number of improvements and we prepared a manual that gives guidance on how to operate in that department,’’ he said.

In its directives, PAC asked Tanesco to make sure procurement anomalies pointed out in the 2014/15 CAG report are not repeated.