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Power tariffs: Why does Tanesco remain adamant?
2008-03-10 08:55:27
By Rayner Ngonji
So, poor Tanzanians are to continue digging deeper into their pockets to get electricity services.
This follows a recent declaration by the Managing Director of the Tanzania Electric Supply Company (TANESCO), Dr. Idris Rashid that come rain, come shine, they won’t reduce existing power tariffs, even if the controversial power purchase contracts are reviewed.
Towards the end of last year, the Energy, Water Utilities Regulation Authority (EWURA) sanctioned Tanesco on raising their tariffs by 21 percent on the Mainland arguing it was meant to enable the company to remain afloat.
The utility firm is alleged to be paying 30bn/- monthly to service the agreement reached in 2006 between itself and Richmond, a fictitious American company, Songas and Independent Power Tanzania Ltd (IPTL).
Dr Rashidi had vowed, emphatically enough, that his company was in no capacity to lower the tariffs but that he would seek to maintain the current rates for a substantial period of time, a remark difficult to swallow in the wake of rising global fuel prices.
However, whether the Tanesco chief oversees that the current power charges are raised or not, that is not the issue.
The concern here is the people`s ability to pay the new rates taking into consideration the incomes of middle and minimum wage earners.
According to World Bank reports, the majority of Tanzanians, similar to many other African countries, live below the poverty line of one US dollar a day.
Sticking to the newly raised charges pegged at 49/- per unit, 9/- up from the former rate of 40/- per unit, and 342,619/- for single phase connection implies that as of now electricity is something of a luxury and will be for the haves only, who do not constitute even ten percent of the population.
The government`s programme of rural electrification launched some four years ago will have to be shelved in view of these tariff hikes.
Tanzania`s power tariffs have for more than a decade been labeled as among the highest in the East and Central African region, grossly affecting production costs.
Reports of the United Nations Industrial Development Organisation (UNIDO) have it that some investors have abandoned investment projects in Tanzania and moved to other countries because of electricity tariffs.
Hence, the Managing Director’s decision to stay put over the issue is still questionable.
If the parliamentary probe committee`s findings into the matter established beyond reasonable doubt that Richmond, a company used to siphon the poor tax payers` money does not exist, and its payment has hitherto been suspended, on what grounds has the managing director opted to uphold the new rates?
Reports that Tanesco and Richmond had agreed on the terms of their contract before they took it to the Attorney General`s Chambers explains why the company is adamant to lower the tariffs.
In other words one wouldn`t be far from the truth in concluding that the Tanesco authorities are part and parcel of the whole scam and their defensive mechanism is just meant to confuse the masses.
When the Richmond scandal was unearthed, though action on the matter has taken a millipede`s pace; members of the public who were convinced that the scam occasioned the frequent power hikes were jubilant.
They anticipated that with the revelations, their suffering would now be relieved.
But the managing director has responded with a slap on the consumers` faces. All their hopes have been dashed. It`s a sour pill but they have no alternative except to swallow it.
One thing wananchi ought to remember is that in Tanzania all economic formulae like `the bigger the supply the lower the price` and `the higher the demand the bigger the price’ do not work.
Several years ago the government hiked sales tax for sugar.
The price has since then kept climbing, resulting in a lot of disharmony amongst families.
It`s a question of bearing the situation or seeking an alternative to withstand the pressure.
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