Dodoma. Legislators have called on the government not to honour a payment of Sh356 billion to US based international power producer Symbion Power until an investigation into the matter is finalised.
The call was made on Monday, May 9, 2022 by Kisesa Member of Parliament, Luhaga Mpina in Parliament, while debating to the Ministry of Investment, Industry and Trade's proposals on revenue and expenditure estimates for the 2022/2023 financial year.
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Mpina who served in various ministries queried why government should pay Sh356 billion to Symbion yet they are not informed the steps that have been taken against those responsible for electricity purchase agreement.
“We should be informed of everything behind agreement and our rights that are in this matter, but also all bad contracts should be terminated,” he said.
According to the Controller Auditor General (CAG) Charles Kichere 2021/22 report Tanzania is losing billions of shillings each year due to delays in disbursement of money to contractors undertaking development projects, illegal termination of investment contracts and a lack of coordination between government agencies.
Explaining, he said on May 24, 2016, Tanzania Electric Supply Company (Tanesco) stopped Symbion from supplying electricity to the national grid due to a dispute over the validity of its electricity purchase agreement, prompting Symbion to file a $1.57 billion case against the entity at the international investment dispute resolution centre.
“On May 21 in 2021 both parties agreed to settle the matter outside the court and signed an agreement under which Tanesco was required to pay $153.43 for terminating the contract,” he said.
Explaining, he said the loss was as a result of Tanesco illegal termination, lack of trust and taking decisions without understanding its implication.
In March 2017, Symbion Power took to the International Court of Arbitration in Paris seeking $561 million settlement for breach of contract, after efforts to resolve the dispute about the validity of the 15-year power purchase agreement for more than a year failed.
However, speaking in an occasion to mark President Samia Suluhu Hassan one year in office Energy minister January Makamba admitted that Tanzania lost a case against Symbion Power, and won an award at the international arbitrator something the Sixth Phase government has to execute.
“We have paid the company as instructed, but there was a clause that allowed the country to repossess the turbines,” he said during the debate without mentioned the amount paid and when the payment was concluded.