NEGOTIATIONS are in progress to convince an independent power producer, Songas, against planned shut-off of two of its six generating plants at Ubungo in Dar es Salaam on Saturday over payment of accumulated arrears.
Parties to the negotiations include the
Ministry of Energy and Minerals, Tanzania Electric Supply Company
(TANESCO) and Songas. The shut-off, is effected, will take off the
national grid about 40 megawatts of power.
“The public should not get worried. We
are still in discussions and we hope to get solution to the problem
before Saturday,” TANESCO Managing Director Felchesmi Mramba told the
‘Daily News’ in an interview in the city.
He said the delays in effecting the
payments were partly contributed by long time taken to verify some
invoices due to some details, which need to be agreed upon or rectified.
“What contributes to the delays in payment is the invoice verification
process, which has been taking long time due to some inaccuracies,” he
said.
Earlier, Songas Managing Director, Mr
Nigel Whittaker, said in the city yesterday that the shutdown of the two
power plants was a beginning of a gradual suspension of operations at
its Ubungo station due to the payment stand-off.
“If no payment for the arrears is
agreed, Songas will need to gradually suspend operations at its Ubungo
power plant,” he told reporters at a breakfast meeting, noting that the
arrears had accumulated to 100 million US dollars, equivalent to 14
months’ payment.
Songas, which has been operating in
Tanzania since 2004, generates about 180MW of power to the national grid
from six plants at Ubungo, using gas from the Songo Songo Island gas
fields. Mr Whittaker said the cash flow at his firm had reached a
critical stage and may need to commence a gradual suspension of its
operations at its 190-mw Ubungo power plant.
“Songas receives most of its revenues
from TANESCO, and like many private companies, it cannot fund its
operations without first being paid,” he pointed out. The revenue that
Songas earns is put back into the business to primarily cover operating
and maintenance costs, taxes and fuel to produce electricity, he added.
According to him, TANESCO’s payments to
Songas had been erratic since early 2012 when the former was forced to
use expensive liquid fuelled generating plants to provide generation
capacity to the country.
Mr Whittaker said the decision had been
taken after their financial situation became untenable because they were
not earning from their main source of income. “This decision has not
been taken lightly as it regrettably may lead to shortfalls in the
country’s electricity supplies.
Mr Whittaker said they were not pushing
for payment of full amount but for a guaranteed payment plan. “We are
not asking for all arrears to be paid today. We’re flexible on how that
can be done,” he said.
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