Tanesco asked to wean itself out of govt subsidies
2006-05-03 09:49:45
By Ludger Kasumuni
TANESCO MD Adriaan van de Merwe sharers a light moment with TANESCO workers before the official opening of Net Group Managers forum held in Dar es Salaam yesterday.The forum was officially opened by the Permanent Secretary to the Ministry of Energy and Minerals, Arthur Mwakapugi.
The government wants the Tanzania Electric Supply Company (Tanesco) to stop depending on hydroelectric power and diversify into alternative sources of energy.
In his keynote speech at a meeting of Tanesco directors and senior managers, Permanent Secretary in the Ministry of Energy and Minerals Arthur Mwakapugi also called on Tanesco to wean itself of government subsidies by adopting a more commercial approach of running the firm instead of depending on government handouts.
Mwakapugi said the government had directed Tanesco to increase the number of electricity consumers from the current 10 to 15 per cent of the population in the next five years.
The immediate challenge to Tanesco is to end the current power outages that precipitated long hours of power rationing early this year.
The second challenge is to ensure that, in future it reduces overdependence on hydropower generation, which is at the mercy of weather vagaries, he said.
He added: ’The third challenge is to ensure the power firm stands on its feet financially by generating its own income and cutting dependence on government subsidies by running it as an enterprise. This is an important challenge.’
Mwakapugi appealed to Tanesco management to work with the government in seeking alternative sources of power ’because hydropower has proved to be risky.’
He said Tanesco must advise the government on how to expand the huge gas power potentials and production of thermal power from coal reserves available at Kiwira and Mchuchuma in the southern highlands.
’There is also the option of harnessing coal to produce power by expanding the existing Kiwira Coal Plant in Mbeya from generating current six megawatts at present to 200 megawatts before the end of next year (2007),’ he said.
’There is also the potential of generating up to 400 megawatts using coal-fired steam engines at Mchuchuma and Katewaka,’ he added.
The PS appealed to both local and foreign investors to expand the capacities of the projects to make intermittent power supply a thing of the past.
He said the government is committed to putting Tanesco on a sound financial footing by converting the expensive thermal power plant owned by IPTL to a gas-fuelled power station by the end of next year.
He said the government would also allow Tanesco to adjust its tariffs upwards by five per cent annually to reflect the escalating costs of power generation and inflation in the country.
Regarding efficiency, the PS told the managers to plug the loopholes through which the firm loses revenue as result of illegal power connections and rampant corruption.
Tanesco managing director Adriaan van der Merwe assured the PS that the 68 managers who attended the meeting would do everything possible to make Tanesco self-sustaining financially by venturing into alternative sources of energy and wiping out graft.
Adriaan conceded that load-shedding had been caused by dependence on hydropower.
He said due to low levels of water in Mtera dam and its satellite power stations – Kihansi and Kidatu dams – load-shedding was still going on.
