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New power tariffs come under barrage of attacks
2007-12-29 09:19:03
By Patrick Kisembo
The hikes in electricity tariffs and service line connection charges announced on Thursday and due to take effect beginning Tuesday next week have come under heavy criticism from members of the business community and ordinary electricity consumers.
Most of those contacted for comment in a random survey by The Guardian in Dar es Salaam yesterday warned that hikes would have a detrimental effect on the lives of the people, chiefly the poor majority, and the entire national economy.
Many said the changes, endorsed and announced by the Energy and Water Utilities Regulatory Authority (Ewura) on request from the Tanzania Electric Supply Company (Tanesco), were unjustifiable and would automatically push up the cost of living, frustrating the Jakaya Kikwete government`s resolve to achieve a better life for every Tanzanian.
Dr Laurean Ndumbaro, acting Chairman of the University of Dar es Salaam’s Research and Education for Democracy in Tanzania (REDET) project, said: ``Prices of goods and services will go up because of this increase in power tariffs and connection charges. The whole move will work against the government`s expectation of seeing the people lead more meaningful lives.``
``The level of income per head will plummet because of the additional charges and the government will find it especially hard making its development plans yield the fruits anticipated. It will be impossible for most people to take care of the new charges and still lead normal, decent lives and so many may opt for alternative, possibly worse, sources of energy,``he added.
The REDET official called on the state-run power supply firm ``to look for increased efficiency from inside its own makeup and corridors instead of rushing into sending charges skyrocketing``.
Highly regarded business consultant Nikubuka Shimwela, chief executive officer and lead consultant with the Dar es Salaam-based Kasuto Company Limited, meanwhile explained that he saw Tanzanians drifting into serious problems in running their various business and other activities ``because everything will be charged according to the hikes in power tariffs and allied costs``.
``At the national level, the cost of production will automatically become less competitive,`` the former senior civil servant noted, adding: ``If things go as it appears they will, then it is possible that the nation and individual players will completely fail to compete in the international market because we shall fail to sell our products.``
Twiga Cement managing director Claus Hvassing also saw the 21.7 per cent power tariff rise sanctioned by Ewura having devastating impact on industrial production and the business sector generally countrywide.
``It might be okay if the hikes announced are rationalised by quality and reliable supply of power. However, any power failures of the likes we have witnessed in the past will disrupt production and trigger further hikes,`` he observed.
Hussein Kihate, a radio maintenance technician at the city’s Kimara suburb, described the new rates as well beyond the affordability of ordinary Tanzanians.
``My job relies a great deal on the use of electricity. It follows, therefore, that I will be directly injured economically because the new tariffs are a lot higher than my meager income will be able to soak,`` a visibly shaken Kihate noted.
He said the authorities concerned ought to have taken into close account the people`s limited purchasing power before coming up with the new rates.
``It makes good economic and common sense to arrive at prices or rates that are within the reach of the majority of customers instead of setting ones that ignite a popular outcry and force many people into even greater poverty,`` added the technician.
Another Kimara resident, Paulina Shayo, was also of the view that the new charges promised to have a far-reaching negative effect on most people`s lives.
``One would be right in saying that what Ewura and Tanesco have done will throw many people out of gear, the only difference being the extent to which that will apply,`` she said.
Commenting on the issue, Confederation of Tanzania Industries executive director Christine Kilindu has recommended that the government speed up the implementation
of plans to end Tanesco’s monopoly in the power supply sub-sector in part by providing incentives to attract private sector investment in power generation.
``We urge the government to develop alternative and cheaper sources of energy such as gas, coal and solar power. As the industrial sector and other consumers see how to adjust to the hikes announced, it should also expedite the process of buying out independent power producers that continue to be a burden to Tanesco,`` she told a news conference yesterday.
The CTI executive further recommended that the power supply company conduct a detailed study, with a view to justifying any increase in excess of 10 per cent and plugging holes through which power thefts are perpetrated and administrative costs keep rising.
``The hikes in power tariffs and service line connection charges and those in the minimum wage come together on January 1, 2008. This is bound to make the incoming year an especially difficult one for manufacturers and the national economy at large,`` she observed.
Ewura announced on Thursday that it has granted Tanesco’s request for an increase in charges for its various services effective from New Year`s Day.
The agency`s director general, Haruna Masebu, told a news conference that they had endorsed a 21.7 per cent hike in power tariffs instead of the 40 per cent the power company had asked for.
He said they had also approved hikes in service connection fees of between 66 and 215 per cent instead of Tanesco’s request for between 66 and 281 per cent.
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