TANZANIA Electric Supply Company (TANESCO), has posted pre-tax profit of 120bn/- in the first nine months of this year, thanks to a 40 per cent power tariff hike in January, 2012.
The state power generator and distributor's data released by the industry regulator - Energy and Water Utility Regulatory Authority (EWURA), shows that in this year's first quarter, Tanesco posted 71bn/-, decreasing to about 7bn/- and 39bn/- in the second and the third quarters, respectively.
EWURA said in the last nine months ending September, Tanesco managed to remain with positive balance after deducting total expenditure. "This signifies that the 40 per cent tariff hike has enabled to strengthen Tanesco's revenues since January 2012," EWURA said at a report presented during the stakeholders meeting to deliberate the firm bid to hike price yet again. In total, Tanesco had made a pre tax profit of 117.09bn/- in the last nine months up to September.
The power utility's turnover for the nine-month period stands at 833bn/-. The firm, however, made a loss of 33bn/- and 240bn/- in the last year's third and fourth quarters, respectively. In October, the Minister for Energy and Minerals, Prof Sospeter Muhongo said categorically and reinstated his statement three days ago that Tanesco was not supposed to hike power tariffs because the government was subsidising the firm's operations.
Prof Muhongo, a geologist, said Tanesco should also explain and justify how they were spending their revenues. According to EWURA, in this year Tanesco's total distribution loss, due to leakage, is a 17.76 per cent or 11.5 million US dollars (about 18.4bn/-) in capital expenditure and 1.17 million US dollars (1.87bn/-) in operation costs.
To reduce the losses by 2.68 per cent between 2012 and 2015, the firm needs 34.5 million US dollars (55.2bn/-) to rehabilitate and replace old infrastructure along the distribution lines. However, Tanesco pushes for tariff hike citing high operation costs resulting from generating power from fossil energy amounting to 5.2 million US dollars (about 8.3bn/-) a day.