The Rufiji Basin Development Authority (RUBADA) has called on the government to take the lead in showcasing the economic potential of Stiegler’s Gorge by acquiring shares in its planned projects.
Speaking in an interview with The Guardian over the weekend, the RUBADA Director General Aloyce Masanja said the multi-purpose project aims to meet Tanzania’s long term electricity demands reliably and cheaply for industrial development of the country.
The country has been facing serious power problems for several years now.
Masanja said that international financial institutions and donor agencies should be jointly approached for soft loans. He proposed that the government form a joint company on commercial principles to see the project through.
He said the project offers flood control plan enabling agricultural development in the Lower Rufiji valley where up to 80,000 hectares can be irrigated.
Once a dam had been built and equipment installed, energy produced would be clean and renewable.
“In the case of Stiegler’s Gorge the area responsible for bringing the water through to the Gorge has a total area of 177,000 Km2,” he said.
“It has been determined by Norwegian consultants that the project can be developed in 4 phases and that when fully developed, up to 2100Mw of electricity can be generated,” he said.
Masanja said further that the first three phases of up to 1,200MW have been fully studied and designed, coming up with a total of 3 power stations.
He said the project offers flood control enabling agricultural development in the Lower Rufiji valley.
According to the Rubada chief, the building of the dam at the Gorge would form a reservoir which will be able to contain water flowing through the main three rivers from upstream.
At present the water flowing through the Gorge is not controlled and floods do occur during rainy season. The dam would be in a position to control the release of water downstream and as such effectively control flooding in the lower Rufiji valley.
This controlled flow of water would allow agricultural development of the lower Rufiji valley of up to 80,000 ha of land with excellent soil for production of a variety of crops such as paddy (Rice), Cotton, Sugar and Maize.
He said the recommended power per station is 4 units each 100 MW= 400MW for station A; 4 units each 200 MW=800MW for station B and 3 units each 300MW=900 Mw for station C.
In 1982 it was determined that the capital requirement of the power project was about 1,400 million USD but the current estimate is USD2bn, said Masanja.
Other potential projects from the project are the development of tourism in the Selous game reserve which is the wildest in the world. Tourism in this area has been hampered by lack of reliable road, Masanja said.
“A good access road (120 KM) will be constructed to Stiegler’s Gorge making the Selous accessible. A careful plan has been made to have minimum impact on the Selous.
The Stiegler’s Gorge lake (1,200 km2) (Stigo lake) will form a good habitat for crocodiles, hippoes and fish and can also be used for recreation purposes,” he said, adding that in order to minimize negative impact to the selous, the majority of the construction work force will be located outside the selous at Kisaki Village, 30 km away.
The lake will also be an ideal habitat for riverine fish, he said adding that the fishing will be controlled but will be an additional source of protein.
Stigo Lake will have 34,000 Mm3 of water, providing a good future source of water for Dar es Salaam and Morogoro.
The project would also address poverty alleviation for most of the population living downstream of the Stiegler’s Gorge, by making available to all the rural villages downstream with electricity and reliable agriculture and with electricity for agro processing.
“The Lower Rufiji Valley is close to Dar es Salaam city and with above developments, youth population will be attracted to move to these areas instead of migrating to the city, “ Masanja said.
He said recently project investors from South Africa showed interest in financing and promoting the Stiegler’s Gorge project, focusing on the power component.
“They proposed to update the feasibility study, solicit the financing of the project, form a company to build and operate the hydropower project and finally transfer the project to Tanzanian government after a period of 50 years,” he explained. The DG said it was proposed that during the operation, Tanzania would be given 10per cent share of the profits.
“This proposal was not acceptable to the Government. The current proposal on the table is to enter into a Public Private Partnership based on equal shares and that the project must be developed as a multi-purpose undertaking as originally envisaged,” he stressed.
He said it is apparent that private investors wish to have majority shares in developing Stiegler’s Gorge as it is a risking investment. A 90-per cent share ownership would see the project through with the remaining 10 per cent being allocated to the Government as its share for the resources available to develop the project (Land, Water etc).
“In this case, the Government of Tanzania would not be required to invest funds in the development of the project. The RUBADA Board has proposed equal shares in developing the project. This has been the stumbling block. Also partnership is seen as a way out to avoid hitches with the Public Procurement Act,” said Masanja.
He said the government must enter into the project, insisting that already experts (Rubada) and others have done their part.
He called on the Minister for Foreign affairs and international co-operation to request and make the Brazilian Government interested to include Stiegler’s Gorge as one of the projects for bilateral co-operation on commercial basis.
The government should also hold a substantial stake in the project, as Brazil and Paraguay did in the development of the Itaipu power project. The power project, run by the two countries produces 14, 000MW of electricity.
“In order to allow for competition and efficiency, a private window should be opened where private investors from Brazil and Tanzania would be allowed to participate. A third window could be opened to allow for private investors outside the two countries,” said the Rubada director general.
“We went to Brazil as a government delegation and we saw how it has implemented its Itaipu power project, with the government taking an active lead. We want the government of Tanzania to decide and run the project in similar manner,” he said.
Masanja told this paper that the talks between Tanzania and Brazil over the USD2bn project were fruitful and that Tanzania was waiting for the Brazilian delegation to visit the project site. “They had elections just as we had and their president was sworn in on Saturday,” he said adding that they were waiting for feedback from the Foreign Affairs minister who was in Brazil for President Dilma Roussef’s swearing in.