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Action against PAT for US $20m default to be presented at 6th parliament

Discussion in 'Jukwaa la Siasa' started by BAK, Nov 24, 2011.

  1. BAK

    BAK JF-Expert Member

    Nov 24, 2011
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    Wednesday November 23, 2011

    THE government will present its report during the sixth meeting of the National Assembly on action that will be taken against a private sector investor who provides gas, PanAfrican Energy Tanzania Limited (PAT), for failure to pay dividends amounting to 20.1 million US dollars (about 34bn/-).

    Several Members of Parliament (MPs) demanded that the Minister for Energy and Minerals, William Ngeleja should resign in connection with the scandal. They also wanted PAT to refund to the government all money stolen from the government for the past six years.

    Through a production sharing agreement (PSA) with the Tanzania Petroleum Development Corporation (TPDC), PanAfrican Energy Tanzania explores, produces and markets additional gas from the Songo Songo gas fields.

    Issuing the government's statement, Minister of State in the Prime Minister's Office (Policy, Co-ordination and Parliamentary Affairs), Mr William Lukuvi said the government has received the report which has 26 resolutions on Gas Sub-Sector as presented in the House by the Parliamentary Standing Committee on Energy and Minerals on Friday.

    "We in the government admit that this report has been prepared and articulated very well but we need time to thoroughly debate on this issue. We have also noticed serious financial irregularities and we cannot debate on this crucial matter for just one day ... we need time," he told the House.

    However, he rubbished claims by a short e-mail message that was distributed to the MPs on Friday that claimed to have come from PAT investor suggesting that President Jakaya Kikwete has assured him of protection. "I want to assure the MPs that the message does not involve the government and its officials in any way...MPs should not be scared and discouraged by such misguided messages," he said.

    Presenting its report on Friday, the Parliamentary Standing Committee on Energy and Minerals, Committee Member Mr Jumanne Selemani Zedi (Bukene - CCM), said that the committee has discovered a serious default in the contract and that the government was losing billions of shillings in the flawed deal.

    It was discovered that PAT, which entered into contract with TPDC on October 11, 2011, failed to pay dividends to the government amounting to 20.1 million US dollars (about 34bn/-), in accordance with the Production Sharing Agreement (PSA) that involved PAT, Songas and TPDC.

    He further said that PAT admitted that they had illegally reclaimed 28 million US dollars (about 46bn/-) to recover the money they spent on production and running costs, which the company claimed that it was a genuine (honest) mistake. The company has agreed that the reclaimed amount be removed from the cost pool so they remain with 25 million US dollars out of the 80 million US dollars (110bn/-) they took.

    He said serious financial cheating was discovered between 2004 and 2009. The committee also discovered that PAT had in all the years been using the money they accrued from production of gas in Tanzania to service their projects in Ghana, Nigeria and Gabon.

    Contributing, several MPs said he contract between the government and PAT should be reviewed and subsequently terminate it and the company taken to the court for forgery, tax evasion and stealing from the government.

    Nzega legislator Dr Hamis Kigwangala (CCM), wanted the House to issue a ten day ultimatum to PAT to refund to the government 46bn/- as well as 110bn/- taken illegally through forgery of documents. He also demanded the company to be taken to the court for forging documents and stealing from the government.

    He also demanded for Ngeleja's immediate resignation because he said the minister has failed to protect the country's natural resources and work on the national interest. Mr Nassir Yusuf Abdalla (Korogwe Urban-CCM), demanded provisions in the contract between PAT and the government be reviewed or terminated altogether. He also accused the investor for what he claimed as 'bullying' the MPs.

    "The investor told us that the contract they entered with the government was more or less canonical and that it could not be reviewed. The investor even went further to tell us that Ngeleja told that the committee lacks biting teeth, the only thing he said we can offer was advice. What is even worrying is that the investor has been assured of protection according to the e-mail we have received," he said.

    North Kilwa legislator, Murtaza Mangungu (CCM) and Felix Mkosamali (Muhambwe-NCCR Mageuzi) also wanted legal actions to be taken against the investor. Mkosamali demanded that those who entered into the flawed deal be revealed and get punished.

    Ubungo MP, John Mnyika (CHADEMA) differed with Said Mtanda (Mchinga-CCM) and Stella Manyanya (Special Seats-CCM), who demanded the contract to be thoroughly reviewed instead of terminating it all together. Myika said an ActionAid Sweden report indicated that PAT had denied the Treasury 65 million US dollars (about 97.5bn/-) in taxes between 2004 to date. He queried why the contract of such nature should not be terminated.