The Parliamentary committee on Energy and Minerals yesterday said some big companies were yet to pay Sh527.1 billion they owe Tanzania Petroleum Development Corporation (TPDC), affecting the latter’s performance.
Dodoma. The Parliamentary Committee on Energy and Minerals yesterday said some big companies were yet to pay Sh527.1 billion they owe the Tanzania Petroleum Development Corporation (TPDC), affecting the latter’s performance.
Committee chairman Dunstan Kitandula (Mkinga-CCM) said, among others, the companies that are owed by TPDC include the Tanzania Electric Supply Company (Tanesco), Songas, PanAfrican Energy Tanzania (PAET), Ndovu Resources Ltd and Kilimanjaro Oil Ltd.
“The debt is causing financial distress and hence affecting the implementation of its duties,” said Mr Kitandula. He said failure to repay the debt led to the failure by TPDC to meet gas purchase and other operational costs hence failure to operate profitably. This, according to the committee’s chair, has also led to the failure of TPDC to invest massively on natural gas sub-sector. Reports show that Tanesco is a big debtor of TPDC after entering into a Gas Sales Agreement in September 2015 whereby the former buys natural gas from TPDC for power generation at Kinyerezi, Ubungo II and Symbion Power Plants.
Local media recently quoted the Controller and Auditor General (CAG) that between September 2015 and December 2017 monthly invoices totaling to Sh567.5 billion were issued by TPDC to Tanesco.
with respects to the natural gas supplied to the latter for power generation. “By December 2017, Tanesco had managed to settle Sh318.9 billion equivalent to 56 per cent of the total amount of invoices, leaving Sh248.6 billion unsettled,” Prof Assad was quoted by media as saying in the report.
There are also concerns that if the state utility company is not assisted to pay the outstanding bills, it is likely that it would pass on the burden to consumers in the long run.
Kilindi lawmaker Omary Kibua (CCM) said poor contracts entered between the government and gas buyers attributed to the loss of TPDC.
He suggested that the contracts be reviewed to improve the negative conditions.
“The government should not let this matter slide, it should instead be considered seriously,” cautioned Mr Kibua.
TPDC was also grappling with a challenge of the price instability of the natural gas for fertilizer industries, which stood at $2.6/mmBTU (one million British thermal units), compared to the operational costs of $5.36/mmBTU.
“The price is below the market price hence eating into operational costs,” said Mr Kibua.
Despite the challenges that TPDC is facing, its revenue collection stood at Sh282.3 billion in the first half of 2018/19, equals to 104 per cent of the target.
2017 monthly invoices totaling to Sh567.5 billion were issued by TPDC to Tanesco with respects to the natural gas supplied to the latter for power generation. “By December 2017, Tanesco had managed to settle Sh318.9 billion equivalent to 56 per cent of the total amount of invoices, leaving Sh248.6 billion unsettled,” Prof Assad was quoted by media as saying in the report.
There are also concerns that if the state utility company is not assisted to pay the outstanding bills, it is likely that it would pass on the burden to consumers in the long run.
Kilindi lawmaker Omary Kibua (CCM) said poor contracts entered between the government and gas buyers attributed to the loss of TPDC.
He suggested that the contracts be reviewed to improve the negative conditions.
“The government should not let this matter slide, it should instead be considered seriously,” cautioned Mr Kibua.
TPDC was also grappling with a challenge of the price instability of the natural gas for fertilizer industries, which stood at $2.6/mmBTU (one million British thermal units), compared to the operational costs of $5.36/mmBTU.
“The price is below the market price hence eating into operational costs,” said Mr Kibua.
Despite the challenges that TPDC is facing, its revenue collection stood at Sh282.3 billion in the first half of 2018/19, equals to 104 per cent of the target.
