SPECIAL REPORT: What’s the hidden agenda in IPTL saga?

Sunday January 11 2015


By Chambi Chachage,The Citizen Correspondent

In this last part of the article on US President Barack Obama’s visit to Ubungo Power Plant, the author looks into the donor community’s concern about curbing corruption and affirming accountability in the country and asks whether it is the rationale behind its interest in IPTL. Read on…

Dar es Salaam. CAG lists the following nine court cases involving IPTL’s shareholders and/or creditors and informs us that it only focused on the first 2: Misc Civil Case No 49 of 2002 pitting VIP against IPTL and Mechmar Corporation in the High Court of Tanzania, Misc Civil Case No 254 of 2003 pitting VIP against IPTL, Mechmar and the Administrator General in the High Court of Tanzania and Civil Application No163 of 2004 pitting VIP against Mechmar in the Court of Appeal.

Others are  Tanesco against Independent Power Tanzania Limited (IPTL) ICSID Case No ARB / 98 /8, Standard Chartered Bank against the United Republic of Tanzania - ICSID Case No ARB I 10/12, Standard Chartered Bank (Hong Kong) Limited against TANESCO ICSID Case No ARB / 10/20, Martha Kaveni Renju the Administrator Receiver of IPTL against IPTL Case No124 of 2003.  There are also Martha Kaveni Renju the Administrator Receiver of IPTL against IPTL and VIP Engineering and Marketing Ltd Case No 98 of 2013, Case for Review No1 of 2012 pitting Standard Chartered Bank (Hong Kong) against Mechmar Corporation, VIP Engineering and Marketing, IPTL, the Liquidator of IPTL, the Bank of Tanzania, Tanesco and TRA in the Court of Appeal.

Is it simply a matter of curbing corruption and affirming accountability, this interest that the donor community has in IPTL? Why, for instance, did the British High Commissioner help Standard Charter Bank delegation to contact the PAC chair – then chairing POAC – in an attempt to lobby for the escrow money? And if the chair had not recently said so publicly in defence of his integrity during the parliamentary debate, how would we have known?

Well, it is all about access to power and information. The then US’ Secretary of the State and a presidential hopeful, Hillary Clinton, knows this very well.

When she visited Ubungo in 2011 this is how she put it: “We believe in partnership, and we believe in competition.

You heard Paul say that when MCC put out the bid to build power lines across this country, a lot of companies competed. But two American companies won. We are very proud of that because we, frankly, want more American companies competing for business in Africa. And we are going to take that message back to America, and urge them to get out here and compete for these foreign projects.”

And the physics I was taught at Azania and Tambaza High School tells me that power is about pressure. Clinton also knows this. Little wonder she thus concluded her remarks at the Symbion Power Plant in Ubungo: “So, I don’t want to put a lot of pressure [on] Symbion and Pike Power, and on the linemen and the government, but this is important for everybody. If you do it right, we are going to go and tell that story across the world.”

Yet, the pressure is mounting as the following excerpt from the MCC Statement on the board of directors’ discussion of Tanzania at the December 2014 meeting: “MCC takes seriously all of its country partners’ commitments to combat corruption.

At today’s meeting, MCC’s board expressed continued concern over corruption in Tanzania, including the implications of the recent case involving Independent Power Tanzania Limited (IPTL).  The board noted that Tanzania has experienced a significant decline over the past seven years on key indicator measuring efforts to control corruption.

While the board voted to allow Tanzania to continue working to develop a compact proposal—given its passage on MCC’s policy scorecards and its strong previous performance as an MCC partner—the board stated its expectation that the government of Tanzania must take firm, concrete steps to combat corruption before a compact is approved.

Further, the board voted to continue MCC’s engagement with Tanzania with the understanding that, in accordance with the Tanzanian State House December 9 statement, the Tanzanian government would act promptly and decisively on the late November parliamentary resolutions regarding IPTL. The board also reaffirmed more broadly that Tanzania must undertake a series of previously agreed upon structural reforms to improve the efficiency, effectiveness and transparency of the energy sector, and more generally to deal with wider corruption.”

In a way it partly, albeit significantly, echoes Obama’s following remarks at Ubungo: “So Power Africa embraces this [Public-Private Partnership] model. Public and private resources will be matched with projects led by African countries that are taking the lead on reform. In this case, African governments commit to energy reforms.  And the US is committing some $7 billion in support, and private sector companies have already committed more than $9 billion. And this is just the beginning - because we look forward to even more companies joining this effort.”

But as the soon-to-be outgoing President, Obama was/is probably in a hurry more than Clinton: He thus also remarked: “Now, in order for this to work, then we all have to feel a sense of urgency. One of the things, Mr President, that I learned around the business roundtable is if we are going to electrify Africa, we’ve got to do it with more speed.  We can’t have projects that take, seven, eight, nine years to be approved and to get online.  If we’re going to make this happen, we’ve got to cut through the red tape, and that can only happen with leadership like the leadership that President Kikwete has shown.”

Isn’t the message clear? Away with ‘Ugly Malaysians?’ Enter ‘America the Beautiful’?