28 January 2013

Tanzania: More Debate Expected On Gas As Bunge Opens

Photo: Capital FM
A natural gas plant: Mtwara residents in Tanzania are protesting the governments plans to pump natural gas to Dar es Salaam through their town.

Parliamentary sessions that start on Tuesday; it is expected, would have a good share of the gas debate. Infact, reports indicate Parliament has been urged to intervene in the gas row and end the tensions that have cropped up in the industry.

It is understood that Politicians have demanded that Parliament uses its constitutional right as adviser and supervisor of the government to help craft a solution to the dispute. There has been mass protests in Mtwara against the construction of a gas pipeline to Dar es Salaam for power production. Local people want the project shelved so that the gas, which is drilled in the region, is used for power generation and for petrochemical industries right at the source.

The $1.225 billion pipeline, which will cover 532km, will transport gas to Dar es Salaam for producing 2,780mw of electricity. It is a joint project between China Petroleum and Technology Development Company (CPTDC), a unit of China National Petroleum Corp (CNPC), and the Tanzania Petroleum Development Corporation (TPDC).

But in an interview with 'POLITICA', national Civic United Front(CUF) National Chairperson Prof Ibrahim Lipumba advised that the pipe should be put up in phases. The government says producing power is cheaper in Dar es Salaam and this will benefit even the people of Mtwara. The fiery debate has spread nationwide, with people from all walks of life weighing in with their opinions. But there are fears that the situation is getting out of hand and could turn violent if it is not handled well.

There are those who argue that a third party needs to come in to calm the fears and deal with the frustrations of both sides. Already, Shadow minister for Energy and Minerals John Mnyika has written to the Speaker of the National Assembly, Ms Anne Makinda, urging her to use her legal powers to appoint a parliamentary committee to try and bring the government and the people's representatives to the negotiating table.

"In addition to defusing the tension between the two sides, the committee will also perform the oversight role of directing the government to solve the issues in the oil and gas sector," said Mr Mnyika, who is also the MP for Ubungo. And other Members of Parliament like Christopher Ole-Sendeka (Simanjiro-CCM) and Madgalena Sakaya (Special Seat-CUF), are behind Mr Mnyika's proposal.

Ms Sakaya added: "I recently visited Mtwara and the situation is tense. People are very angry, thinking that the government has shortchanged them and ignored their interests. We have no option but to let the Parliament intervene." Mr Mnyika said the problem had escalated because of an oversight vacuum in Parliament due to the absence of the Parliamentary Committee on Energy and Minerals.

The committee was suspended during the budget session last year. It has neither been reinstated nor a new one created to replace it. "This means the Energy and Minerals ministry has been conducting its business without any engagement with the Parliament because there is no committee on Energy and Minerals," Mr Nyika said.

Other stakeholders said the government must use the collection of views on the draft gas policy as an opportunity to encourage debate and create a national consensus on how to handle oil and gas issue. The government is now collecting views in order to improve the draft natural gas policy before it is adopted by the cabinet.

The policy will pave the way for new laws. Meanwhile, proposals in the draft natural gas policy to have a National Oil company in place has been praised but questions raised on how the new regulator would be structured. Business leaders and analysts at a Policy Forum discussion on whether the Natural Gas Policy addresses the needs of citizens said the proposal to have a National company in place to handle commercial interests on behalf of the government was welcome but that it should explicitly show how the new regulator would be structured.

In his paper, the Executive Director for Mr Amani Mhinda, said the importance of having a national oil company is that there would be learning of business from within,helping industrializing the country on the basis of its indeginous petroleum resources,promote the development of local content and eventually become a regional and global player. "The gas policy has decided on TPDC being National oil company and creating another entity to be regulator.

This means that TPDC is proposed to handle commercial interest on behalf of the government, "he said But he questioned on what would happen to past contracts where TPDC were both regulator and benefactor. He said the policy should start with contract transparency,reduce capital flight and maximize retention in the local economy. He said the proposed draft gas policy 'avoids' the upstream matters, while focusing on mid and down stream issues.

"There are fundamental questions regarding monitoring and regulatory capacity of the sector. There is no way that the Gas policy can unilaterally change the functions of TPDC for example without undermining petroleum law.This contravenes the spirit of petroleum sector reforms," he said.

He noted that the policy should not create monopoly rather than energy balance as it presupposes to give over 3000 Megawatts by 2015 way above the overall electricity requirement, shutting out hydro and renewabls. He cautioned that it should not turn the country back from pushing for renewable energy. The Gas Infrastructure Manager at Songas Mr Malcolm Taylor said the policy addresses the citizen's needs through facilitating informed democratic debate and setting realistic timescales for development.

He said the policy should address issues as where the investment would come from and what it needs,review TPDC's many conflicting roles,balance between domestic use and export and how to go about putting in place an LNG plant. He said it was also important to 'seriously think' about how the Sovereign Wealth Fund would be structured.

Mzumbe University don Dr Prosper Ngowi said the policy should be looking forward to establishing local competence in policy, regulatory and commercial areas and technical through local content. The Head of Communications at Statoil-one of the giant players in the country's gas sector,-Ms Genevieve Kasanga said there is need for awareness on the gas sector and capacity building so that local human resources are trained to run the sector effectively.

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