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Tanesco pressure method, power cuts, back with a vengeance

18th November 2012

Economic observers will as usual take time to realize that something has changed in how power supply is being managed; usually, they can only ‘comprehend’ things when the country’s electricity monopoly offers this or that excuse for intermittent and repetitive power cuts.

At the time that he took over the ministry, Prof. Sospeter Muhongo gave away a few of these top secrets and even unraveled management ‘micro projects’ where Luku is bought, electricity flows but the cash does not go into Tanesco coffers. Their very understanding friends in the media have never gone back to that story, left it dead, not fallow, as this isn’t the sort of corruption that they look for, but when whites, Indians will gain.

Yet the change in how electricity is delivered could be mapped out or located as to when it took place with what Marx said was ‘the precision of natural science,’ as to when old ideologies collapse after the signatures of economic victories of various classes have been placed.

In that case, after the government failed to ‘bell the cat’ at the height of accusations of bribe taking among members of the parliamentary committee on energy and minerals, and actually declared that the minister and the permanent secretary apologized for what they said, the signatures had been placed. The cat had been returned to its rightful place, in the sitting room, and in the dark alleys the rats of ruminating on public finances will continue with abandon.

One issue which sets off the minister against the giant parastatal -- about which he has now admitted he is not capable of confronting, its entire management and parliamentary backers, aside from sidelining one influential member of the management -- is the minister’s very strategy. Prof. Muhongo belongs to the old school which realizes that the corporation can or does make plenty of money and has no reason to be given subsidies by the government, because it could even contribute at least Tsh10bn per month to the Treasury if it was in appropriate managerial hands.

What the Tanesco management and staff want to see is energy being prioritized by the government, and they continue getting the usual Tsh300bn or Tsh400 bn in subsidies annually as they were given during the time Zakia Meghji was finance minister.

After hankering for more than a year for government signature of guarantee for payment of Tsh500bn in a commercial loan from the banks, finally the minister for Finance, Dr William Mgimwa signed for a paltry guarantee of Tsh105bn, not more, and this surely did not go down well with the Tanesco top brass and thus must have sought for a way out.

Prof. Muhongo had explained how they create more or less artificial power shortages to pressurize the government, which could be seen in the manner they pick their excuses.

There is usually a standard source of blame for the power cuts and it shifts from time to time, first it was Kihansi, then Songas, and now it appears Pan African Energy have agreed to take the blame, whose logistics are slightly unclear for those looking from outside. The fact that wildcat power interruptions are back is indicative of just one thing, putting pressure on government to ‘prioritize’ it.

The model that the minister has given concerning Tanesco, that it should be a parastatal organization that is profitable and provides a cut of profit to the government, is only practicable if it is profoundly reformed; so long as it is a public company in the sense of being state owned, it will be entitled to receive public funds like Air Tanzania, TRL, Tazara, NIC and not be expected to provide cash to the government.

If one wishes to get rid of this dependency context, whose only reason is continuous and intermittent leakage of funds in all areas of parastatal management, is to place it lock, stock and barrel in the private sector, at the risk of stepping unto the toes of those whose religion is defending the total code of Mwalimu’s economic policies, while they toss out the constitution. Prof. Muhongo is unlikely to arrive at that level of achievement, introducing that policy to the government and carrying it out, etc.

The critical issue here is that after the minister and the permanent secretary were publicly humiliated and compelled to apologize, or letting it be known that they have no quarrel with what the Speaker said, their ability to control the management and board at Tanesco has been severely dented. Now everyone in Tanesco knows that the minister will have realized that the game in town is to cooperate, not start this or that firefighting exercise against the company as it will come to nought; how many top members of the management, or their backers in the board, is Prof. Muhongo ready to clear out? The difficulty he faced in tackling the single case of Eng. William Mhando should serve as a lesson, to let the board work and then exercise due diligence in picking a new board or board chairman when the time arrives, to wit.

This event should also serve as a lesson among those who for more than a decade have been peddling the faulty notion of ‘good governance’ as the panacea to economic woes, as most of them have little or no interest in economic reform, rejecting the idea that foreigners can come and buy land or companies, especially these same parastatal organizations. This school of thought has no idea of what Mwalimu told an audience at the Nkrumah Hall (students and staff of the University of Dar es Salaam) in August 1978, that ‘every country has a government it deserves,’ in which case those who keep out economic reforms and the sort of market discipline it introduces in how each company conducts its work, should not for once expect that this shall be brought by the back door, by the minister. The system shall always win, and this is also why Mwalimu kept shuffling ‘general damagers’ from one corporation to another, so as to preserve national unity, for those in his interest group will never accept accusations of cash pilferage.

In case anyone thought that since the 1970s or 1980s there has been enough seminars, and that people are more aware of their rights than before, and consequently public officials are under an obligation to deliver, which means the minister will retain the interest and drive to clean up Tanesco and succeed, only need to look at the tip of their noses.

The whole clamor of the fight against individuals tainted with suspicions of corruption failed because they remained popular in their home areas, received as heroes once malcontents had rifled pointless accusations in Parliament (the popular view at their electoral bases) forcing them to quit.

Not a single one of the ministers who have resigned since 2008 became at all unpopular at home, not one, in which case public posturing about the issue is really because one is whipping a hide, and would wish the president or for that matter the government, to whip a real wife…

The country will thus have, as Mwalimu had explained at The Hill, the sort of corporations it deserves, as one cannot refuse economic reform, the dictates of the market, and then by some miracle, by shouting at the board and management, change their ways of doing things; when shove comes to push, ministers desist and that will be the end of their barking.

From then onwards the government will surely conform.