Light at the end of tunnel for Liganga, Mchuchuma projects

Investment, Trade and Industry deputy minister Exaud Kigahe. PHOTO | COURTESY

What you need to know:

  • The government has decided to change course and intensify its search for investors for the Liganga and Mchuchuma projects in a move that seeks to expedite the implementation of the long-awaited iron ore mines and plants 

Dar es Salaam. The government has shifted course and intensified its search for investors to carry out the eagerly anticipated Liganga and Mchuchuma project, The Citizen has learnt.

The investment involves construction of the Mchuchuma coal mine, a 220kv transmission line between Mchuchuma and Liganga for supplying the Liganga Metallurgical Complex, and an accompanying 600-megawatt (MW) thermal power station.

Investment, Trade and Industry deputy minister Exaud Kigahe told this paper last week that the task of discussing with investors was now shifted from the Government Negotiation Team (GNT) committee to the National Development Corporation (NDC) in order to speed up negotiations.

China’s Sichuan Hongda Co. Ltd. inked a $3 billion deal with Tanzania in September 2011 to mine coal and iron ore in the country, but the project never materialised due to the government’s failure to reach an agreement with investors.

“The discussion between investors and the government has taken so long because we had failed to reach consensus with investors on a number of issues including tax incentives,” said Mr Kigahe.

The Citizen understands that the Chinese company won the tender for the massive project with the potential to create 5,000 jobs and 30,000 indirect ones in 2010, but its rollout has been beset by bureaucratic delays.

Mr Kigahe, on the other hand, was quick to express his optimism that with the conversations with investors being switched to NDC, which is under his ministry, they will quickly reach a win-win situation with them. He said that if the continuing negotiations with the current investors do not result in a conclusion, the government will have to consider engaging in talks with other investors.

The government made the decision to shift negotiations with investors to the NDC in response to the recommendations of the Parliamentary Public Investment Committee (PIC). Presenting in Parliament the committee’s report covering 2020/21 financial year in November, Mr Jerry Silaa, who is the committee’s chairman, said it was high time the government stopped discussing the same issue of Liganga and Mchuchuma and instead started walking the talk.  Alternately, Mr Silaa added, the talks should be shifted to the NDC with a view to doing away with red tape.

For his part, Mr Joseph Kamonga (Ludewa legislator-CCM) commended the government’s decision to shift talks with investors to NDC, saying the move will spur transparency and thus speed up the process.

The shifting of responsibilities, he explained, will make NDC more responsible, or else, they will face  the wrath of the parliamentary committee responsible for industries and trade.

He stated to The Citizen yesterday that at first, because GNT is a part of the President’s Office, it was difficult for the committee to hold it accountable.“Political will is very important when it comes to the implementation of the Liganga and Mchuchuma project,” noted Mr Kamonga.

The implementation of strategic projects like Liganga and Mchuchuma, he explained, will boost economic growth. “Globally, there is a significant need for coal. Let’s make the most of the resources we have at our disposal,” urged Mr Kamonga.

The International Energy Agency (IEA) reported  last month that global coal consumption was set to rise to an all-time high in 2022 and remain at similar levels in the next few years if stronger efforts are not made to move to a low-carbon economy. Efforts to get fresh comments from Mr Silaa and his deputy George Malima proved futile as the former’s phone went unanswered, while the later said he needed time before giving his comments.