What if govt pays its Tanesco bills?

By Editor

                                                                   Editorial Cartoon

The Tanzania Electric Supply Company (Tanesco) unveiled its pay-or-lose power campaign two days ago, saying government institutions alone owed it 129bn/- out of the staggering 233bn/- in debt by the end of last year.


Tanesco is a fully state-owned firm and so it was, in a way, a case of the government owing itself. But no matter because, after all, the institutions in debt are supposed to have funds with which to settle electricity bills!

It is well known that power supply reaches only about 20 per cent of Tanzania’s population of 40-plus million and even then, many of the lucky people often experiencing sporadic power cuts or low voltage conveniently blamed on technical faults.

In October last year, the entire country was subjected to severe power rationing which lasted a month or so. The firm attributed the problem to major routine maintenance ostensibly to ensure better performance thereafter.

With the long-running power outages still on, Tanesco issued an ultimatum in late November last year. This time around it was threatening that another indefinite power rationing was on the way because the firm had been operating at a loss as customers had for years defaulted on the payment of bills coming to staggering amounts of money.

Tanesco pleaded for a 67.87 per cent hike in power tariffs, arguing that what it collected from its customers compared extremely poorly with the costs it incurred in generating or buying and later selling electricity. Put differently, the firm was saying it was so overwhelmed by operational costs as to fail even to break even.

As the firm awaited the government’s approval of the tariff hike request, some economists argued that the rise would be a huge burden to ordinary citizens and activities that heavily depend on electricity, while also putting off investors.

Some economists had even suggested that the government shoulder the debt through budget reallocation, which would have meant cuts in funds set aside for other sectors to help guard against worse power supply woes.

The World Bank reported last month that Tanesco had accumulated 416bn/- in debt, which is set to be serviced by the government. The bank expressed grave concern over the future of the country’s economy should the firm accumulate further debts.

Despite the public outcry and reservations by economists and other experts over any subsequent hikes in power tariffs, the Energy and Water Utilities Regulatory Authority granted Tanesco’s request. The power firm meanwhile promised better services, this by definition including fewer outages and more stable voltage.

But with the recent revelation by Tanesco itself that public institutions were among its most notorious debtors, people are understandably wondering seeing the government endorse higher tariffs for customers who have been paying their bills without fail.

Even worse are reports of thousands of people being supplied with outrageously many units of “free” electricity – a monthly 750 units per head, or so we are told – just because they happen to be Tanesco employees. Meanwhile, power thefts continue unabated.

With this, are we really serious about wanting to see Tanesco doing serious business and are we really being fair to the firm’s loyal customers? It’s food for thought for those who care. 

SOURCE: THE GUARDIAN