According to the producer, its decision
to suspend operations at the 189-MW plant has come after the alleged
failure by the Tanzania Electric Supply Company to settle debts
amounting to 90 million US dollars (about 196.2bn/-).
However, in a quick response by the
TANESCO Managing Director, Engineer Felchesmi Mramba, the utility firm
allayed fears on the possibility of power rationing due to the decision.
“Songas had made a great mistake by
revealing terms of the contract between the two parties to the media,”
he remarked. “It is true that we owe Songas; but not the amount they
have stated.
There are confidentiality clauses in the
contract between Songas and Tanesco. We will take appropriate actions
against these breaches,”Eng Mramba told a news conference in Dar es
Salaam yesterday afternoon.
The Tanesco boss as well disputed the
amount of arrears as claimed by Songas Limited. He, however, failed
short of stating the actual amount, noting that by so doing he will be
revealing terms of the contract.
“Songas is trying to impose fear on the
public and at the same time tarnishing the image of the government and
Tanesco. They have so far shut down 81 per cent of their power plants
but there haven’t been power shortages,” he stated.
According to Eng. Mramba, Section 4 (4)
of the contract between the two parties requires an aggrieved party to
issue a 90-day notice pending negotiations. If no resolution is made,
then the party should inform the government as a guarantor.
“If all these processes do not work out,
then Songas could have issued another notice on the decision to shut
down the plants but this has not been done,” he explained.
Earlier, the Managing Director of Songas
Limited, Mr Nigel Whittaker, told reporters that the company had been
gradually suspending operations at Ubungo since April 29 with one
remaining turbine of the capacity to generate 30MW set for closure
tomorrow (Wednesday, May 11).
“Since 2004, the Ubungo Power Plant has
been a major player in the electricity sector, generating about 20 per
cent of power supplied to the national grid,” Mr Whittaker stated. The
gas-fired turbines at Ubungo produce power using natural gas piped from
gas fields in Songo Songo Island, Lindi Region.
“The decision by Songas Limited to
suspend operations is a result of nearly four years of receiving erratic
payments from Tanesco. During 2015, the amounts owed by the power
utility increased significantly, making us unable to fund operations.
“We had decided to suspend operations
early this year but at the strong request of Tanesco and government, we
decided to continue generation after we were assured outstanding
payments would be settled,” he explained.
Over the past few months, he explained,
Songas, Tanesco and the Ministry of Energy and Minerals, have been
trying to reach a solution on how to pay the arrears on time all in
vain. Mr Whittaker said the power utility firm has been making some
weekly payments but the arrears have continued to grow putting
operations of Songas at risk.
As a result of the arrears, the Songas
boss revealed that the company has failed to pay 30 million US dollars
(about 65.4bn/-) it owes the Tanzania Petroleum Development Corporation
(TPDC).
“The revenue that Songas earns is put
back into the business to primarily cover operating and maintenance
costs, taxes and fuel to produce electricity.
“Thus, a significant portion of our
earnings is returned to government owned departments such as TPDC and
the Tanzania Revenue Authority (TRA),” he noted. The company said it
will continue to discuss with both TANESCO and the government to remedy
the situation
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