Tanzania Daily News (Dar es Salaam)

5 March 2013

Tanzania: Tanesco in Critical Financial Mess

Photo: Chris Kirchhoff
Electricity pylons.

THE Tanzania Electric Supply Company Ltd (TANESCO) is facing serious financial problems and yet has failed to collect some 78 billion shillings being outstanding bills owed by the government, public and private institutions.

The power utility firm has nevertheless reassured customers that there were no plans to institute power shedding in the country. Tanesco's Acting Managing Director Eng. Felchesmi Mramba told reporters on Monday that the outstanding debts do not include about 90bn/- that are current bills to customers urgently needed to sustain power generation, distribution and transmissions.

Despite the unpredictable general revenue situation according to him, the power utility firm was relatively on average existing capacity showing no plan to supply power on rationing arrangement as feared by many.

"It is true we are operating on losses but we are trying to maintain the existing production capacity and avoiding power rationing at any cost," he said. The company has since embarked on a debt collection mission to boost its coffers.

He said for the last four days some power cuts were reported in different areas in the country because of the ongoing rehabilitations in a number of plants and stations to do away with unstable power production systems.

Although he was uncertain to precisely state when the country will be able to produce enough power, he was certain on the current production which now stands at 750 MW and 850 MW during peak hours.

However, he was concerned over the huge costs incurred to maintain fuel powered plants currently producing 365MW with those using diesel feasting 1.36 million litres a day.The consumption forces Tanesco to part with 5.4bn/- a day while it can only manage collecting revenues not more than 2bn/- a day thanks to the subsidy arrangement from the government.

Since July last year to February this year the government had dished out 231.2bn/- to reinforce operations which consumed over 650bn/- in total to sustain the services and more importantly avoid power rationing.On claims that the Company owes billions to Songas, Engineer Mramba admitted on the debt but was hesitant to disclose more details due to legal contractual obligations and technicalities.

"It is true we owe Songas but all our partnership agreements are in accordance with legal contracts signed between the two parties that can not be disclosed publicly.

But we are paying them accordingly," he said.On some new products, the MD announced a new arrangement still in pipeline with the Tanzania Communications Regulatory Authority (TCRA) where from June customers will be notified on various matters through short message services.

Some of the messages will be about power cuts information where customers will be notified on its causes.Another system, he said, will be installed in Dar es Salaam to start with where technicians will be made easy to allocate technical faults due to power cuts and attend them as soon as they occur.The system called Distribution Scada will be installed and work with GPS system to simply manage the operations technically.

On power poles tendering processes, he denied allegations that Tanesco denies local companies from tendering for supply of the poles and said the tendering process has been transparent with international bidding arrangement."We are having six companies, three local and three foreign, to supply the poles according to the Public Procurement Act requirements and there is no problem with that area," he said.

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InFocus

Is Tanzania's Energy Sector at Crisis Point?

Electricity pylons.

The country's main electricity provider is facing a financial crisis amid reports that the billing system has not been implemented effectively. Read more »