Dowans suffers 3bn/- penalty former Richmonduli Daily News Reporter Daily News; Thursday,October 04, 2007 @00:02 TANZANIA Electric Supply Company (Tanesco) has asked 2.43 million US dollars (about 3.06bn/-) payment in penalties from Dowans Holdings, following the firm's failure to fulfil its contractual obligations. Dowans Holdings entered into an agreement with Tanesco to supply and install gas based generation plants at Ubungo that were supposed to become operational on February 2. Tanesco Managing Director Dr Idris Rashidi said in a statement yesterday that the amount required was cumulative penalties Dowans owes the power utility firm following its failure to attain Commercial Operation Date (COD). Dr Rashidi said Dowans Holdings only achieved COD yesterday, instead of February 2. "This means it achieved COD 234 days behind the schedule," he said. He said the penalty was in line with the agreement between the two parties which imposed a daily penalty of 10,000 US dollars as liquidated damages if COD is not achieved as agreed. "The penalty is calculated from the date when the plant had to be commissioned up to the actual date when the plant is commissioned," said the Tanesco boss, adding that he will request the government to deduct the amount from monthly capacity charges, starting this month. Tanesco entered into Emergency Power Purchase Agreement with M/S Richmond Development Company of USA on June 23, last year, in which the latter undertook to supply and install 100 MW gas based generation plants at Ubungo. The contract was among measures taken by the government and Tanesco to mitigate the poor generation condition which faced the country due to poor rains. However, in December last year, M/S Richmond sought TANESCO's consent to assign the contract to another company, namely M/S Dowans Holdings of United Arab Emirates, which assumed all contractual obligations and responsibilities vested upon M/S Richmond. M/S Dowans however failed to commission the 100 MW plant in accordance with the terms of the Agreement for reasons that were not TANESCO's.