Richmond: How it all began
2008-07-01 10:48:11
By Guardian Reporter
Richmond Development Company LLC, until then falsely known as a US firm, was awarded a contract on June 23, 2006 to provide 100MW of emergency power generation, as Tanzanian electricity supplies were affected by low rainfall and low water levels at the reservoirs that supply the country�s main hydro schemes.
According to the Public Procurement Regulatory Authority (PPRA) there was remarkable `political influence` and interference by `higher authorities` in government in the awarding of the tender to Richmond.
PPRA findings show that the power utility company (Tanesco) had initially identified two bidders out of the short-listed eight - Renco SPA of Italy and Real Energy of UK - more relatively more responsive to the bid requirements than Richmond Development LLC.
Other short-listed companies included, Aggreko International (UAE), APGUM Company Limited (Germany), Globeleq Limited (UK), GAPCO (Tanzania) Limited and QUANTUS of Germany.
Although Tanesco had already rejected the company as incompetent, the government went ahead and picked Richmond without even conducting due diligence on the company.
It is believed that the selection of Richmond as the successful bidder was personally done by a top government leader on June 21, 2006.
Despite receiving USD 152,000 a day from the government, the company failed to provide electricity before the water levels had risen and power supplies had returned to normal.
Richmond�s generating equipment did not turn up on time and the state power company Tanesco, recommended that the company`s services were no longer needed but the Prime Minister`s office advised the government to extend the deal, despite the fact that Richmond had sold its contract to another firm, Dowans Holdings, in 2007.
On November 11, 2007, the Speaker of the National Assembly formed a parliamentary select committee consisting of Harrison Mwakyembe, Eng. Stella Manyanya, Mohammed Mnyaa, Lucas Selelii and James Mtangi after members of parliament demanded investigation into circumstances that made the government enter into a contract with the controversial power-generating firm.
The committee was tasked to investigate who is Richmond Development LLC, who owns it, how the firm secured the power generating contract and
whether the method to acquire the contract was legal.
The team also evaluated Richmond`s contract with Tanesco.
The committee presented its report in parliament in February this year showing that the company had no experience, expertise and was financially incapacitated to carry on the task.
The committee reports also said the company had no share records or straight registration in the US or Tanzania and that the whole bidding process was marred by corruption and gross irregularities.
The committee advised the government to take action on all people involved in the controversial contract as well as terminating the contract with Dowans, the successor to Richmond company.
Following the committee`s recommendations, then Prime Minister Edward Lowassa, former minister for mineral and energy Nazir Karamagi and former minister for East African Cooperation Ibrahim Msabaha, who were all implicated in the scandal, resigned.
Dr Msabaha was the minister for energy and mineral when the controversial contract was signed in 2006.
The government had been paying Dowans USD 152,000 per day as capacity charges ever since.
SOURCE: Guardian