Drop Luku supplier, minister tells Tanesco

Energy and Minerals minister George Simbachawene is briefed by Tanesco Managing Director Felchesmi Mramba on the progress of the construction of a power sub-station in Mbagala, Dar es Salaam, yesterday.  PHOTO | CORRESPONDENT 

By Katare Mbashiru, The Citizen Reporter

In Summary

• The Energy minister also directed the State power company to take appropriate action against Selcom, and advised Tanzanians to subscribe to Maxcom Tanzania as Tanesco seeks another company to replace the disappointing firm.

Dar es Salaam. Energy and Minerals minister George Simbachawene has directed Tanesco to revoke its contract with Selcom Wireless Limited for its alleged failure in supplying pre-paid power (Luku) service to its customers and breach of tax obligations.

The Energy minister also directed the State power company to take appropriate action against Selcom, and advised Tanzanians to subscribe to Maxcom Tanzania as Tanesco seeks another company to replace the disappointing firm.

Tanesco entered into an agent-and-principal relationship with Selcom and Maxcom Tanzania to sell electricity through electronic channels and on commission calculated on the deposited amount.

But recently, customers subscribing to Selcom have been greeted with frequent outages which made Tanesco a target of blame from frustrated subscribers.

“Tanzanians are having problems purchasing electricity units. Long queues have been observed at Luku vending stations with clients hoping the system would stabilise in due course but that has not been the case,’’ Mr Simbachawene told reporters yesterday. Immediately after the minister’s directive, Tanesco managing director Felchesmi Mramba said Tanesco terminated its relationship with Selcom on Wednesday after receiving a letter from Tanzania Revenue Authority (TRA) that the company had been contravening its tax obligations.

“TRA wrote to inform us that they (Selcom) had failed to comply with tax obligations and that they had been submitting fake documents to TRA,’’ he added.

Because of that, the MD said, Tanesco wrote Selcom and told them that the power firm has been slapped with a ban barring it from undertaking power transactions.

Director for taxpayer services and education at TRA, Mr Richard Kayombo, declined to comment yesterday when contacted. “We don’t discuss confidential issues with non-entitled persons,’’ he told The Citizen.

Yesterday, some mobile phone companies sent messages to their customers informing them that Luku services were unavailable because of problems with partners and urged them to visit Tanesco agents— instead. However, they did not give details on the said partners.

Asked if the government had considered any legal consequences upon its unilateral revocation of its contract with Selcom, the Energy minister said there was no way the firm could pursue any legal action against the decision because it had already contravened the law by failing to pay tax as required.

Contacted yesterday to comment on the action by Tanesco, Selcom Executive Director, Sameer Hirji, said: “No comment, we will have a press conference tomorrow (today).” Mr Simbachawene’s move came yesterday during his tour of Dar es Salaam Region to inspect electricity projects that he said would end power woes immediately after they are accomplished in March next year.

In January, Selcom filed a case to demand Sh5 billion in damages from Tanesco following a dispute involving Luku vending transactions.