How truth was twisted
By Correspondent
* Sitta differs with Ngeleja on compensation
In December last year, finally the bad news to millions of poor Tanzanians but good story to the masterminds of the dubious deal, came out when the International Chamber of Commerce Tribunal ordered the Tanzania Electric Supply Company (Tanesco) to pay Dowans Holdings(T)Limited a whopping $ 62 million (about Sh 93 billion).
And, on Thursday, the Minister for Energy and Minerals, William Ngeleja, concluded the matter when he officially declared that Tanesco will have to pay the whopping billions to Dowans as decided by the ICC, dashing earlier hopes of appealing against the ruling.
Earlier before the minister's conclusion, the government's Chief Legal Adviser, Justice Fredrick Werema, told the media that after carefully studying the ICC's judgement, his opinion was that there was no room for appeal, adding that the judgement was a result of politically motivated decisions.
The Attorney General told the media that after thoroughly reading the 100-page judgement, it was impossible for Tanesco to have a strong appeal and therefore the latter will have to bear the brunt of bad political decisions, which led to the termination of the dubious power supplying contract in mid 2008.
Though to many, the judgement came as a surprise, to the architects of the deal it was a well calculated move - and a road to rob the poor to pay the company that dubiously won the power generating tender.
In the request submitted at ICC Tribunal in November, 2008, Dowans prayed for payment of $ 149million, allegedly for breach of contract and for partially unpaid capacity charges in the case heard in June this year, but ended up being awarded $ 68 million.
According to the 100-page judgement, a copy of which The Guardian on Sunday has seen, earlier the controversial Dowans Holdings had filed an application at the ICC demanding a total compensation of $149 million (Sh223 billion).
Dowans claimed that Tanesco's move to terminate the contract it inherited from the US-based firm Richmond Limited Liability Company was unlawful.
It also further claimed that the termination was reached because of political and media pressure in Tanzania.
Dowans Holdings was controversially assigned by Richmond LLC to undertake the responsibility of generating and supplying electricity to Tanesco, after the US firm totally failed to deliver within the agreed period specified in the contract.
The company was operating five gas-powered turbines with a total output of 112 megawatts.
Tanesco was to pay more than 100bn/- in capacity charges alone to Dowans Holdings during the two-year duration of the dubious contract.
Before the end of last year, the government's Chief Legal Adviser, said his office was thoroughly reading the 100-page judgement in order to establish whether it could file an appeal or not.
But, just a week ago, the Attorney General dashed the hopes of many when he revealed that there weren't any plans to file an appeal, adding that Tanzanians should bear the brunt of the Parliamentary decisions taken about three years ago.
Whether measured by the total headlines it has made or the amount poor taxpayers will have to pay, following the ICC's judgement, the Dowans scandal has rocked the nation and divided the public.
While some commentators have supported the move saying it is a lesson to politically motivated decisions like the one taken against the controversial Richmond deal, to many, this is a well coordinated theft perpetrated under the umbrella of the corridors of law.
If the Parliament established beyond reasonable doubts that the deal was dubious and unlawful, it is appalling to pay billions of taxpayers' money to the very same people who were behind the hesitant deal.
There's no doubt that the contract in question was null and void, after it was established by the Parliamentary Probe Committee, and an independent consultant that the original contract signed between Tanesco and Richmond was illegal.
To put things into simple perspective, the termination of the contract was a result of thorough investigation by the Parliamentary Committee, which among other things recommended that the deal be terminated immediately.
The Probe team also directed Tanesco to appoint an independent consultant to study the legality of the Richmond contract, and give legal opinions on how the matter should be ended.
If Richmond's contract was dubious and illegal, it's impossible for the Dowans Holdings (T) Limited, which is the inheritor of the Texas-based company to demand any compensation following the termination of the much debated contract.
The truth is very clear that Dowans Holdings(T) Limited inherited a contract, which was illegal, and therefore, had no legal powers to claim any damages resulting from the termination of the contract originally signed between Tanesco and Richmond LLC.
It is agreeable for the original contractor to assign a third party to undertake its responsibilities provided the previous contract was legally signed and had a legal clause that stated clearly that in case of any failure by the original contractor, the latter shall assign a third party to undertake the assignment.
According to the Minister for Energy and Minerals, by interpretation of the original contract, such clause was there, and that's why when Richmond failed, it sought a third party, Dowans Holding(T) Limited to undertake the tender.
But, in this particular case, it was established beyond reasonable doubts that the contract was seriously flawed and therefore lacked the merits of being a legal agreement between Tanesco and Richmond.
The contract that violated the Public Procurement Act of 2004, can't be termed a legal contract by all means, and that's why its heir, Dowans Holdings(T) Limited, lacks grounds to claims any compensation.
In issuing its judgement, the ICC based on the facts that despite all the public outcry as well as the findings by the Probe team, Tanesco continued to consume electricity from Dowans Holdings(T) Limited for about six months.
But, there's something totally wrong in the ICC's arguments. It should be noted that the government doesn't operate as an individual but as an institution. After the recommendations by the Parliament in February, 2008, that the contract between Tanesco and Richmond be terminated, the government agreed to do so, but needed time to consult with key stakeholders.
Before the termination, the government advised Tanesco to seek an independent consultant, who will study the contract in question and advise the company on how to terminate the contract.
Now while waiting for the termination of the contract, Tanesco continued to consume electricity from Dowans Holdings (T) Limited as per agreement in the dubious contract.
Tanesco couldn't just stop consuming electricity immediately after the tabling of the recommendations by the Parliamentary Probe Committee in February, 2008 because first, it needed enough time to engage an independent consultant to advice the company on how to terminate the contract in question.
Therefore the argument by ICC, which was also supported by AG and the Minister, is baseless.
It's also appalling to hear that the very same consultant that advised Tanesco on how to terminate the contract, and later on represented the Power utility firm at the ICC, is supporting the AG's stand that there's no room for appeal.
Something might be wrong somewhere because it's impossible for three different parties, the AG, the Minister and consultant to suddenly have the same opinion in a case which, two years ago, it was established beyond reasonable doubt that the deal was dubious.
Though the AG issued his legal opinions, it's not necessarily a reflection of what the court of appeal would have decided, and therefore taking his advice as a final verdict is also unjustifiable. Not every legal opinion is one hundred percent perfect when it comes to judiciary affairs, because in judging the case, the court considers various factors especially credible witnesses and facts presented by both parties.
It's the very same AG's office that failed to advice the government properly during the process to award Richmond a $179 million power supply deal in 2006 according to a report tabled by the Parliamentary Probe Committee led by Kyela legislator, Dr. Harrison Mwakyembe.
For those who have read the 100-page judgement copy, it's obvious that some of the witnesses who testified before the ICC were either coached by interested parties or acted under a very strong external influence.
For instance, while one witness told the ICC that the termination of the contract was caused by political pressure, the very same witness testified before the Parliamentary Committee in November, 2007 that the deal was marred by corruption and interference from certain prominent politicians.
There's also another strange U-turn taken by the government, which has left many people wondering. It's quick conclusion that there wasn't any appeal against the ICC's judgement, which is contrary to the earlier stand that the government would appeal after thoroughly reading the 100-page document.
We all know how it's difficult for the government to agree with various judgements especially those wanting it to pay billions as compensation. Today, there are many appeals before the high court or court of appeal filed by the government against various judgements issued in favour of private companies.
One of them is the long-standing case of Valambia and company, the legal cost of which is nearing what this very same government is ready to pay Dowans Holdings.
But, surprisingly, the very same government has softened its stance about controversial Dowans Holdings, which from the beginning was a dubious deal sealed under suspicious conditions.
Though the government finally named the so-called shareholders of Dowans Holdings, after three years of dilly-dallying, there are still more doubts about the authenticity of those mentioned as the directors of the company. We are told by the Minister that Dowans Holdings (T) Limited is owned by two major shareholders, namely, Dowans Holdings from United Arab Emirates and Dowans International from Costa Rica.
According to the Minister, the company was incorporated in Tanzania and registered by Business Regulatory and Licensing Authority (BRELA) in order to allow it to operate in the country.
Not only that but also the company has all foreigners as its directors according to the documents by BRELA. However, the authenticity of the names of the named directors is questionable, and the truth is that even BRELA itself can't verify various addresses given by the individuals during the registration process.
It's the same BRELA that registered the 33 companies which pocketed billions of taxpayers through Central Bank's External Payments Arrears, whereby till today, majority of those listed as directors can't be traced.
It's the very same authority that registered mysterious Deep Green Company, a shoddy firm that stole about $10 million from the Central Bank of Tanzania, but till today, its directors can't be reached.
Therefore for a Minister to rely on such a reckless organisation when making decisions about taxpayers billions is questionable. The masterminds of Richmond LLC are the ones who brought Dowans after their ‘trap' to steal failed to mature, and therefore they might have taken precautionary measures to conceal the real identities of the owners of Dowans Holdings(T) Limited.
It's unusual for a multinational company to operate without a website or proper address in today's world where technology is more advanced than any other century. First it was claimed that Dowans Holdings was registered in United Arab Emirates, but when we did thorough search in Dubai and Abu Dhabi, it was established that the company doesn't exist.
Then there was another twist; it was claimed that Dowans Holdings is a Costa Rica-based company. But during that period, its directors or shareholders remained mystery till last week when a local tabloid, which, two years ago claimed to have interviewed the company's owner, named the individuals behind the company.
How did this company inherit the multibillion contract from Richmond? During the original contract, was there any clause that stated that in case of any failure by Richmond to generate electricity, the latter would assign another third party of its choice to undertake the tender? How did a dubious company, Richmond, which failed Tanesco and the government was allowed to chose its successor?
Was the due diligence conducted to establish the authenticity of the new successor of Richmond? If the ICC established that Richmond has no rights to demand any compensation from Tanesco, where did its inheritor get that legal rights of being compensated $65 million with interest?
It's obvious that there are still more questions than answers regarding the Dowans scam, but one day, history will judge those trusted by the public to oversee the affairs of Tanesco, which is currently in a dire financial situation.
Politically, those who were seen as victims of this scandal have finally won at the expense of the poor. Today, their stand is that we are paying the cost because of politically motivated decisions.
They are now pointing an accusing finger at Samuel Sitta and his team for being the source of what the country faces today. But while they might have won in the short-run, in the long-run, the price may be bigger than the billions granted by ICC.
While to the mastermind of the deal, this might be a big victory to majority of Tanzanians this is robbing the poor in the name of International Chamber of Commerce.
SOURCE: GUARDIAN ON SUNDAY
My Take: Angalia hapo kwenye red kuhusu uhovyo wa BRELA. Mafiosi kutoka Sicily wanaweza wakaja hapa kuanzisha makampuni na Brela ikawakubalia bila hata kujua anuani zao halisi!!