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Badilisha Lugha KISWAHILI

Parliamentary committee wants govt repaid 32bn/-

8th February 2012
Energy and Minerals minister William Ngeleja

The parliamentary Standing Committee for Energy and Minerals has called for the immediate repayment of $20.1 million (32.2 billion/-) said to have been fraudulently paid to Pan African Energy Tanzania (PAT) Ltd through a gas production sharing agreement with the state-run Tanzania Petroleum Development Corporation. 



Muleba North Member of Parliament Charles Mwijage gave the position in the National Assembly yesterday when presenting the committee’s response to a report on how the government dealt with the 26 resolutions made by the House on businesses in the gas sub-sector.  



Energy and Minerals minister William Ngeleja had earlier submitted that since PAT was yet to give explanation on the remaining $35.4 million (56.64 billion/-), the government had instructed the Controller and Auditor General (CAG) to conduct a special audit to verify the claims.   


He said it was expected that subsequent CAG and other findings would enable the government to take appropriate action in line with parliamentary committee proposals.

“The committee is also advising that the government also review the terms of reference and all other areas over which the committee had suspicions,” noted Mwijage.

Ngeleja explained that the government had formed a team known as GNT to look into the matter, adding that it would begin its work on February 20, 2012 and submit a report on negotiations with PAT by end of next month.

“The team is under instruction to come up with proposals on appropriate action the government should take,” he said, adding that there were procedures to be followed before terminating the agreement between PAT and government as stipulated in the agreement itself.


He noted that that would include issuing a declaration of conflict, having either side issue a 90-day notices and, if the conflict is not resolved, having the matter referred to executives and later on proceed to the arbitration stage. 



The House Energy and Minerals committee wants the Bill on the gas sub-sectors tabled in that Parliament at the next meeting (in April), with a view to ensuring the enactment of a law that would govern the fast-developing sector. 



Debating the government report, Bumbuli MP January Makamba said he agreed with the report, but it was full of pledges rather than implementation of earlier pledges. 


He added that it was advisable that the government’s negotiating team incorporate the officer of the Director of Criminal Investigation as well as the Tanzania Revenue Authority “since there are implications of criminality and matters relating to tax evasion”.


John Cheyo (Bariadi East) said it was embarrassing seeing that almost every agreement the government entered into was faulty, adding that shady contracts should be avoided “to make Tanzanians benefit more from the country’s abundant natural resources”. 


John Mnyika (Ubungo) meanwhile said during negotiations the GNT “should also seriously touch on allegations that PAT evaded tax amounting to $65 million (104 billion/-), as reported by Swedish ActionAid.


Felix Mkosamali (Muhambwe) called on the government to ensure that the $20.1 million is paid immediately “as it is simply not acceptable for PAT to keep dillydallying on effecting genuine payments to government”. 



“Together with demanding that the payment be effected without any further delay, we want to see appropriate action taken against all officials involved in this saga so that this House can be deemed strong. Otherwise, this House will turn into a toothless body that just issues directives after pledges by the government,” he said. 


Controversy surrounding the gas sub-sector ensued in mid last year during debate over the 2011/2012 Budget estimates of the Energy and Minerals ministry, leading to the formation of Energy sub-committee of the House Energy and Minerals committee to investigate the matter.

The sub-committee submitted its report in the House in November 2011 when a number of irregularities, including the failure by PAT to pay the hefty amounts of money to the government, were laid bare.

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