Villagers claim Sh360m in gas royalties

Monday November 7 2016

By Louis Kolumbia @Collouis1999

Songo Songo. Residents of Songo Songo Village in Lindi Region have accused Kilwa District Council of failing to remit Sh357 million as the village’s share of revenue collected from a company extracting natural gas in the area.

The villagers say the council has failed, without any explanation, to release to the village over Sh170 million in service levy for eight years (2004-2012) and over Sh180 million from 2014 to the first quarter of this year.

They claim that they have not received a satisfactory response from the council on the whereabouts of the money, and have called for the intervention of President John Magufuli and the Prevention and Combating of Corruption Bureau (PCCB).

The village leadership is finalising plans to form a committee charged with establishing why the money has not been paid in contravention of the council’s by-laws which require part of revenue generated from a natural resources to spent on development of the locality where the resource is found.

According to the villagers, gas extraction on the island commenced in 2004 after Songas, through PanAfrican Energy (PAE), began operating in the area.

Chapter 299 of the Local Government Act of 1982 states that district councils are to be paid royalties not exceeding 0.3 per cent of total revenue generated in a financial year.

According to Kilwa District Council by-laws, villages where natural resources are exploited are entitled to 20 per cent of the 0.3 per cent revenue paid to the district.

“We have information that the council has been receiving the money on a quarterly basis, but the village has not been getting its share as required” said Ms Chiku Abdallah, a member of the village steering committee.

“We will fight for what is rightfully ours, and we are ready to exhaust all available avenues, including seeking audience with President John Pombe Magufuli.”

The villagers believe there is a network of dishonest district officials who are lining their pockets with money meant for the village, and called for the intervention of Dr Magufuli, PCCB and the Controller and Auditor General (CAG).

Village Executive Officer Juma Mchenga told The Citizen that the village received payments in six quarters (the two last quarters of 2012 and all four quarters of 2013) amounting to Sh139.5 million. Another payment of Sh24 million was released in the second quarter of 2016.

But from 2004, when PAE began operating in Songo Songo, to 2012 (the first two quarters), the village did not receive a single cent despite money having been remitted to Kilwa District Council by the gas company.

A Tanzania Petroleum Development Corporation (TPDC) report says the council received Sh885 million from 2004 to 2012.

This means that Songo Songo Village was supposed to be paid Sh177 million as its share during that period, being 20 per cent of the sum paid to the council.

From 2014 until the first quarter of 2016, no money was remitted to the village. But taking into consideration that the village has been receiving an average of Sh20 million, it was supposed to have been paid a total of Sh180 million in arrears in the nine quarters from 2014 to the first quarter of 2016, according to calculations done by The Citizen. It means that Kilwa District Council owes Songo Songo Village Sh357 million in outstanding payment. Kilwa District Council Director Zabron Bugingo said he was unaware of the previous claims, adding that what he knew following his appointment three months ago was that Songo Songo Village was supposed get 20 per cent of what PAE paid to the council.

“Having completed one quarter at the council since my appointment, I have already paid the village Sh24 million as their share of the Sh115 million remitted to the council by PAE,” he said.

Songo Songo residents have been depending on gas revenue to provide them with capital for various economic activities, including fishing.