IPTL: we charge lowest

06Feb 2016
Our Reporter
The Guardian
IPTL: we charge lowest

The Independent Power Tanzania Limited (IPTL), one of the national leading producers of power has refuted media reports that it was central in raising consumption tariffs as it topped its major rivals, namely Aggreko, Symbion and Songas in capacity charges per unit, saying it charged the lowest.

It has released figures comparing itself with other major players in the market in a quest to clean its otherwise crumbled image portrayed by a local Swahili tabloid that alleged it had been charging exorbitant capacity charge fees far above others, unfoundedly raising the end consumer tariffs. “Available data indicate that the cost of capacity charges paid to IPTL is the lowest of others paid to independent power producers,” said a statement issued by the company secretary and senior legal councilor Joseph Makandege.According the statement, IPTL charges Tanesco $0.0106 (Sh22.8) per unit, as opposed to Aggreko’s $0.0577 (Sh123.9), Symbion’s $0.0565 (Sh121.3), Symbion’ (natural gas) $0.0499 (Sh107.1) and Songas’ $0.0431 (Sh92.5).  Makandege who is also the Acting Chairman of IPTL and Pan Africa Power Solutions Tanzania Limited (PAP) said the tabloid fumbled by saying that Tanesco had been paying a constant daily amount of Sh300m to IPTL worth capacity charges.He said IPTL had never charged such amount as capacity charges per day stating that his company received Sh40m to Sh100m from Tanesco every day depending on the power supplied.A couple of weeks ago this paper made several attempts in vain to various IPPs including IPTL to clear the controversy behind the capacity charges and the mystery behind the company’s expansion plans that would also see it migrating to gas-powered-turbines.The heavy-fuel to electricity plant has been infested by a series of scandals ever since its inception in 1995, with the latest being last year’s that cost jobs  of top government officials at the Bank of Tanzania (BoT) following the siphoning of $120m from  coffers related IPTL’s deals.The money was reportedly moved from an escrow account created in 2006 after Tanesco and IPTL were involved in a capacity charge dispute that was taken to the International Centre for Settlement of Investment Disputes (ICSID).Until recently IPTL was a joint venture between a Malaysian company, Mechmar, and Tanzanian firm VIP Engineering and Marketing Ltd. However, PAP has since taken over from VIPEM.The scandal led to a public outcry with development partners announcing that they would withhold Sh937bn ($558m) in budget support for the 2014/15 financial year until they were satisfied with the outcome of the CAG investigation.The Parliament Special Committee indicated last year that Tanesco had been spending a huge amount of money to purchase electricity from IPTL, negatively affecting financial status of the national power supply monopoly company. The government also said it was looking into the possibility to buy the IPTL plant.Shoddy electricity power contracts between Tanesco and private power companies have been causing huge financial damage to the company, threatening its financial stability for many years.