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[TD="class: createdate"] Monday, 10 December 2012 23:53 [/TD]
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By Louis Kolumbia, The citizen correspondent
Dar es Salaam.
A request by Tanesco to increase electricity tariffs by 155 per cent as of next month have been rejected outright by stakeholders who pointed out that the rise would overburden consumers and mess up the struggling economy.The Tanzania Electric Supply Company Ltd (Tanesco) had been pushing for a tariff increase over a long period now, ostensibly to enable it to meet rising operational costs and pay a Sh400 billion debt.
Speaking yesterday at a forum organised by the Energy and Water Utilities Regulatory Authority (Ewura) to gather views on Tanescos request, consumer groups, manufacturers and individual customers said the state-owned power firm should find other ways to repay its debts instead of resorting to raising charges.They said it was bad enough that households and businesses have to contend with unreliable electricity supply, so hiking charges would be adding insult to injury.
One of the options for Tanesco should be to reschedule the debt payment period with its creditor. We already lose a lot because of the insufficient and irregular power supply, so increasing tariffs cant be the way to go right now, said a representative from the Confederation of Tanzania Industries, whose name could not be immediately established.
Mr Franklin Kashaga from the University of Dar es Salaam said conceding to Tanescos demand would undermine the strategy of rural electrification as hard-pressed villagers wont afford electricity.
In my opinion, power charges should actually go down. Its surprising that a country that boasts discoveries of huge reserves of coal and gas is a power supplier agitating that consumers pay more! he wondered.The Ewura Consumer Consultative Council, (Ewura CCC) said the automatic adjustment formula proposed by Tanesco depending on three highly volatile parameters namely: inflation, fuel prices and foreign currency exchange rates would lead to unstable power prices.
Price fluctuations will defeat the fundamental objectives of price stability stated in the Electricity Act 2008, Ewura CCC Vice chairman, Mr Said Mohamed, said.
The Government Consumer Consultative Council urged Ewura to conduct thorough technical and financial audits on behalf of consumers to determine if the increase in tariffs would translate into improved services.
It is high time Ewura audited Tanescos annual development projects to ensure that only those which are sustainable and are of benefit to consumers are undertaken, a representative of GCCC said.
Consumers have till this Friday to air their views before the Ewura board sits down to determine Tanescos request.
Making a case for the rise in tariffs, Tanesco acting director general Felchesmi Mramba said the power firm owes various companies in the country about $250 million (Sh400 billion).
The debt comes from the services that Tanesco has been receiving from the companies to facilitate power generation especially when the country struggled to overcome shortages of electricity as of from January this year.
The companies include Symbion, Songas, Pan African Energy (PAE), Camel Oil and Oryx that have been supplying Tanesco with crude oil and gas used in its turbines for power generation.Reports that The Citizen earlier received indicated that some of these companies are facing liquidity problems that have seriously affected their operations.
The claims were justified in Dar es Salaam today during the stakeholders meeting to determine Transcos proposal for the multi-year reflective electricity tariffs in Tanzania as submitted to Ewura.
Mr Mramba stressed that several companies owed Tanesco huge sums of money, though he wasnt in a position to give a breakdown. He just told this reporter: Basically, many companies owe Tanesco money that add up to $250 million
He said Ewura had agreed to power tariff adjustments to address shortages that faced the country as an emergency measure to deal with the problem on the assumption that water in electricity generating points would improve.
Other assumptions were that Tanesco would secure a Shs408 billion loan, Sh136 billion loans granted by the government would be converted to a mere subsidy and that crude oil imports would enjoy tax exemption.
Only one assumption has been fulfilled: the Sh136 billion has been reduced to a government subsidy to Tanesco, the rest remain a huge challenge to the company, he said.
He added: The company incurred higher costs serving customers than it earned from selling electricity to the final consumers, something that has accumulated the deficit said Mr Mramba.
He said tariff adjustments requested aimed at reviving the general performance of the company through rehabilitation and construction of transport and distribution lines and installation of a LUKU meter to every customer countrywide.
These initiatives will be accompanied by voltage improvement measures already enforced whereby several transformers and more substations will be built or expanded said the acting director.
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[TD="class: createdate"] Monday, 10 December 2012 23:53 [/TD]
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By Louis Kolumbia, The citizen correspondent
Dar es Salaam.
A request by Tanesco to increase electricity tariffs by 155 per cent as of next month have been rejected outright by stakeholders who pointed out that the rise would overburden consumers and mess up the struggling economy.The Tanzania Electric Supply Company Ltd (Tanesco) had been pushing for a tariff increase over a long period now, ostensibly to enable it to meet rising operational costs and pay a Sh400 billion debt.
Speaking yesterday at a forum organised by the Energy and Water Utilities Regulatory Authority (Ewura) to gather views on Tanescos request, consumer groups, manufacturers and individual customers said the state-owned power firm should find other ways to repay its debts instead of resorting to raising charges.They said it was bad enough that households and businesses have to contend with unreliable electricity supply, so hiking charges would be adding insult to injury.
One of the options for Tanesco should be to reschedule the debt payment period with its creditor. We already lose a lot because of the insufficient and irregular power supply, so increasing tariffs cant be the way to go right now, said a representative from the Confederation of Tanzania Industries, whose name could not be immediately established.
Mr Franklin Kashaga from the University of Dar es Salaam said conceding to Tanescos demand would undermine the strategy of rural electrification as hard-pressed villagers wont afford electricity.
In my opinion, power charges should actually go down. Its surprising that a country that boasts discoveries of huge reserves of coal and gas is a power supplier agitating that consumers pay more! he wondered.The Ewura Consumer Consultative Council, (Ewura CCC) said the automatic adjustment formula proposed by Tanesco depending on three highly volatile parameters namely: inflation, fuel prices and foreign currency exchange rates would lead to unstable power prices.
Price fluctuations will defeat the fundamental objectives of price stability stated in the Electricity Act 2008, Ewura CCC Vice chairman, Mr Said Mohamed, said.
The Government Consumer Consultative Council urged Ewura to conduct thorough technical and financial audits on behalf of consumers to determine if the increase in tariffs would translate into improved services.
It is high time Ewura audited Tanescos annual development projects to ensure that only those which are sustainable and are of benefit to consumers are undertaken, a representative of GCCC said.
Consumers have till this Friday to air their views before the Ewura board sits down to determine Tanescos request.
Making a case for the rise in tariffs, Tanesco acting director general Felchesmi Mramba said the power firm owes various companies in the country about $250 million (Sh400 billion).
The debt comes from the services that Tanesco has been receiving from the companies to facilitate power generation especially when the country struggled to overcome shortages of electricity as of from January this year.
The companies include Symbion, Songas, Pan African Energy (PAE), Camel Oil and Oryx that have been supplying Tanesco with crude oil and gas used in its turbines for power generation.Reports that The Citizen earlier received indicated that some of these companies are facing liquidity problems that have seriously affected their operations.
The claims were justified in Dar es Salaam today during the stakeholders meeting to determine Transcos proposal for the multi-year reflective electricity tariffs in Tanzania as submitted to Ewura.
Mr Mramba stressed that several companies owed Tanesco huge sums of money, though he wasnt in a position to give a breakdown. He just told this reporter: Basically, many companies owe Tanesco money that add up to $250 million
He said Ewura had agreed to power tariff adjustments to address shortages that faced the country as an emergency measure to deal with the problem on the assumption that water in electricity generating points would improve.
Other assumptions were that Tanesco would secure a Shs408 billion loan, Sh136 billion loans granted by the government would be converted to a mere subsidy and that crude oil imports would enjoy tax exemption.
Only one assumption has been fulfilled: the Sh136 billion has been reduced to a government subsidy to Tanesco, the rest remain a huge challenge to the company, he said.
He added: The company incurred higher costs serving customers than it earned from selling electricity to the final consumers, something that has accumulated the deficit said Mr Mramba.
He said tariff adjustments requested aimed at reviving the general performance of the company through rehabilitation and construction of transport and distribution lines and installation of a LUKU meter to every customer countrywide.
These initiatives will be accompanied by voltage improvement measures already enforced whereby several transformers and more substations will be built or expanded said the acting director.
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