Donors to cut funding over IPTL, claim MPs

Kigoma South Member of Parliament, David Kafulila speaks at the press conference in Dar es Salaam yesterday when brief about the issue of PAP, IPTL and ESCROW Account. Left is Muhambwe MP Felix Mkosamali.  PHOTO | VENANCE NESTORY 

By Florence Mugarula,The Citizen Reporter

In Summary

• The legislators say the country risks losing billions in donor cash following delays to release investigation report on “dubiously withdrawn” escrow cash at BoT

Dar es Salaam. Donors, especially those in Europe, are withholding funds meant to support the 2014/15 Budget pending the release of the two probe reports on the $250 million in escrow monies, part of which was paid directly to Pan Africa Power Solutions Tanzania Ltd (PAP) after the company claimed it has bought 70 per cent shares in Independent Power Tanzania Limited (IPTL).

The claim that development partners are withholding budget support was made yesterday by the outspoken Kigoma South MP (NCCR-Mageuzi), Mr David Kafulila, who had taken the matter to Parliament earlier this year, following an expose by The Citizen.

But, this paper couldn’t independently verify Mr Kafulila’s claim after our repeated efforts to get a word the donors and the minister for Finance proved futile yesterday.

The IPTL scandal has been under investigation by two powerful institutions, the Prevention and Combating of Corruption Bureau (PCCB) and Controller and Auditor General (CAG). While The Citizen can authoritatively confirm that PC

PCCB had almost finished investigations by early last month, the CAG office is said to be still on it as it waits for a testimony from an undisclosed witness from Oman, who claims to be the owner of Piper Link Ltd.

Piper Link is an offshore company registered in British Virgin Island, which the PAP executive chairman, Mr Harbinder Sing Sethi, claims it sold him 70 per cent shares of Mechmar Berhand in IPTL, in September, last year $300,000 (Sh500 million), according to documents submitted to Business Regulatory and Licencing Authority (Brela).

Mr Kafulila told reporters that the country risks losing up billions in donor cash following delays to release the CAG report, which donors would like to see and then look into issues related to the IPTL scandal before fulfilling their pledges towards general budget support (GBS).  He said Tanzanians should understand that so far, donor countries have not contributed anything towards the 2014/15 Budget, thanks to the IPTL scandal.

 Mr Kafulila, alongside Muhambwe MP Felix Mkosamali (NCCR-Mageuzi), addressed reporters at their  party headquarters on the development of the CAG and PCCB investigation reports on IPTL and escrow account controversy.

 Among the projects that could fail to take off due to lack of donor cash include those under USA Millennium Challenges Corporation (MCC) Phase II, he claimed.

 According to the MCC congressional budget for fiscal year 2015, MCC plans to use $766.0 million (Sh1.2 trillion) for compact assistance to Liberia, Morocco, Niger and Tanzania, which were selected by MCC board of directors in December 2012.  In the past five years, Tanzania enjoyed USA support under MCC on which various projects were implemented.  More than $700 million (Sh1.1 trillion) were released to Tanzania following an agreement between the two countries signed in February 17, 2008.

 The 2014/15 Budget depends so much on donor goodwill even as government state that it aims to be self-reliance.

The government expects to receive grants and loans from the development partners amounting to Sh2,942. Another Sh274.1 billion are for basket funds and Sh1,745 billion for development projects.

 “If the government fails to take serious measures against the culprits, its obvious donors will not release funds,” he said, adding that the US for instance won’t release money under MCC Phase II until the puzzle on the IPTL is unravelled.

The MP further threatened that if the government fails to release the two reports, he would move a motion of no confidence against either Prime Minister Mizengo Pinda or President Jakaya Kikwete.

 “I would like to make myself clear: it’s high time the government released these reports, we’re talking about Tanzanians interests here; we want the government to clear these issues and tell us what is going on,” he said.

 Mr Kafulila said the Parliament didn’t form a special team to probe the IPTL scandal on the grounds that the CAG and PCCB reports would do the job.