Government on the spot over delays in Liganga, Mchuchuma projects

 

By Alawi Masare

Reporter

Mwananchi Communications Ltd

Summary

·         China’s Sichuan Hongda Co. Ltd inked a $3 billion deal with Tanzania in September 2011 to mine coal and generate power in Mchuchuma and iron ore in Liganga, but the projects have never materialised due to the government’s failure to reach an agreement with investors

Dar es Salaam. The Parliament yesterday raised concern over delays in developing key coal projects, saying they would face market challenges if prolonged.

China’s Sichuan Hongda Co. Ltd inked a $3 billion deal with Tanzania in September 2011 to mine coal and generate power in Mchuchuma and iron ore in Liganga, but the projects have never materialised due to the government’s failure to reach an agreement with investors.

Deputy Minister for Investment, Industries, and Trade Exaud Kigahe told the National Assembly yesterday that the government revived negotiations with the prospective investors and completed the review of the project compensation last year.

 “I would like to assure you that the ongoing effort will enable timely implementation of the project,” said Mr Kigahe as he responded to a question posed by Ms Neema Mgaya (Special Seats-CCM).

Ms Mgaya had asked when the government would start the implementation of the project that has the potential to generate 600 megawatts of electricity. In her supplementary question, Ms Mgaya asked the government to be specific about when the project will start to win the global market for coal. “The comment that negotiations are ongoing has been a chorus for a long time,” she said.

“Considering the fact that coal will have no market in the world in the next 10 to 15 years due to upcoming energy technology, can the government set a specific time for completing the ongoing negotiations?” she asked.

“We have reached a good stage, and I believe the negotiations will come to an end in the next financial year (2023/24),” Mr Kigahe responded.

The response was greeted by another concern from the deputy Speaker of the National Assembly, Mr Mussa Zungu, who said “such kind of government response has been the same for more than 10 years now.” “Remember, if there was no Russia-Ukraine war, coal would have no market in the world. You will all be responsible for what you are doing today,” Mr Zungu warned.

The project involves construction of the Mchuchuma coal mine and a 220kv transmission line between Mchuchuma and Liganga.