Govt faces tough moment as power woes loom large

[BAK]

Govt faces tough moment as power woes loom large

By Florian Kaijage

15th December 2012

The Government faces difficult choices of approving the 81.27 percent increase in electricity tariffs or continue spending tax-payers monies estimated at Sh160 billion in monthly subsidies to the financially troubled Tanzania Electrical Supply Company (TANESCO).
Tanesco's total monthly revenue collection stands at Sh90 billion but it spends Sh250 billion to sustain its power generation – a deficit of Sh160 billion.

From these figures, it is clear that even if the government were to approve a hike in power tariffs by 81.27 percent as requested, that increase would bring only Sh72 billion – and there would still be a deficit of Sh88 billion.

Earlier this week, the Minister of Energy and Minerals, Professor Sospeter Muhongo assured the public that there would be no hike in power tariffs, but that statement is likely to prove a mere temporary reprieve.
And if Muhongo's public statement could stand – partially sanctioned by the Energy and Water Utilities Authority (EWURA) -- there would still be a huge financial burden on government business as Tanesco continues to operate on unimaginable losses.

Tanesco business figures reveal that the national utility firm is nowhere near breaking even in its routine operations, leave alone making a profit.

The main question here is; who will bear the cost emanating from Tanesco's losses to the tune of Sh160 billion a month? This staggering amount of money comes from the fact that the state-owned utility firm spends Sh249.6 billion a month to generate electricity.

Based on that figure, it implies that Tanesco needs Sh3.036 trillion ($1.89 billion) per annum, which exceeds 20 percent of the current country's annual budget of Sh15.1trillion (for the 2012/13 fiscal year).
The exorbitant costs of generating electricity is rooted in the privately owned diesel and Heavy Fuel Oil (HFO) powered plants located in Dar es Salaam, Dodoma and Arusha, consuming Sh42 billion monthly in capacity charges -- which is nearly 50 percent of Tanesco's total monthly revenue
Capacity charge is money paid to the owner of the power generating plant regardless of the operation of that plant, which means the money accumulates every month and has to be paid even if the plants were to switch off.

These costs do not include the price tag for buying power from the same independent power producers – while the so-called capacity charges still have to be paid whether Tanesco consumes electricity or not.
The financially troubled Tanesco is now asking for the 81.27 percents increase in power tariffs -- or risk bankruptcy.

Tanesco acting Managing Director, Felchesmi Mramba told this paper on Thursday that his office sought the tariff hike as agreed with Ewura through a formulae prepared by a Spanish consultant, AF-MECADOS.
"There were a number of factors which the consultant did not take into account … we argued that considering those factors … including increased dependency on fuel-powered generating plants, an 81.27 percent increase was deemed appropriate," noted Mramba.

On Muhongo's statement that there will no tariff hike Mramba said Tanesco was aware of the ministry's position before they engaged in the discussion with Ewura for the proposed increase on electricity charges.
He expressed: "We do not see any problem in the statement by the minister … so long as the central government is ready to provide the much-needed funds so that Tanesco can carry on with its smooth operations.

"There are two different ideas; the first one is that every person who consumes electricity should pay appropriate tariff, and the second idea is for the government to subsidize the tariff from taxpayers' money.
"This is because most of the people prefer paying low tariffs and that forms the basis for the government's continued subsidy … though this is unfair to taxpayers who are not connected to the power grid," Mramba observed.

Official figures at the ministry of Energy and Minerals show that only 18 percent of Tanzanians are connected to electricity, most of them urban areas – and just 6.5 percent of rural residents have access to power, even though they form 75 percent of the country's population. The national five-year development plan inaugurated in June 2011 projects the increase of connectivity to electricity at 30 percent by year 2015.

Mramba is optimistic that the current overspending on power generation would end in the next two years upon completion of the Mnazi Bay/Songosongo – Dar es Salaam gas pipeline which is under construction. Power generation by gas is billed to be 50 percent cheaper.
The 532-Kilometer pipeline is expected to haul an estimated 420 million standard cubic feet a day, enough to generate more that 2000MW of electricity.

The Ghost of capacity charges
Last July this paper reported exclusively that, according to Tanesco's financial analysis and forecast for the period between July and December 2012, capacity charges alone would cost the state power utility a whopping Sh256 billion. At the same time, Tanesco would spend another Sh331 billion during the same period an average of Sh55 billion per month to buy electricity from private producers.

This means that, when all the sums are done, Tanesco would be left with a monthly deficit amounting to Sh3 billion shillings.

However, the problems have since worsened with the drastic drop of water levels at the six hydropower generating dams, namely Kidatu, Mtera, Kihansi, New Pangani, Hale and Nymba ya Mungu.

The biggest winners in Tanesco's spending spree are Songas, Independent Power Tanzania Limited (IPTL), Symbion and Aggreko.
Symbion alone would pocket a staggering Sh85.755 billion in six months in capacity charges from its plant located in Dodoma, but would still sell power to Tanesco worth Sh19.602 billion -- which surpasses its ability to sell by more than 400 percent. According to technical documents made available to The Guardian, the same company (Symbion) would receive a monthly Sh74.327 billion over the next six months (Sh12 billion) in capacity charges, but would still sell power worth Sh20 billion at its heavy fuel powered plant in Arusha.(Duh! This is daylight robbery)

Songas was meanwhile projected to make Sh28.248 billion in capacity charges over the same period, but would sell power worth Sh56.103 billion (Sh9 billion) every month. IPTL is the only independent producer making lowest returns on capacity charges, projected at Sh4.964 billion during a period it expects to produce energy worth Sh168.9 billion.

Symbion Dar es Salaam will charge comparatively lower expenses on capacity charges against money spent on power purchases, now currently estimated at monthly incomes of Sh22 billion in capacity charges and Sh35.3 for sale of energy from its Jet A1 fuel-powered plant, while Aggereko would receive is Sh12 billion in capacity charges compared to Sh24.691 for energy produced.

This paper had also established that Tanesco had projected to spend Sh69.83 billion in six months on fuel and lubricants to run the independent power plants and some owned by Tanesco – all amounting to Sh11.6 billion.


SOURCE:THE GUARDIAN

 

[PMNBuko]

Please we want answers why this daylight robbery?? These are the contracts that should be dishonoured straightly!

 

[Kocha]

Haya ndio mambo ya msingi yanayopaswa kujadiliwa humu ndani lakini nashangaa members wanapita tu kama vile hawaoni jinsi biashara kichaa inayo fanywa na TANESCO kushirikiana na serikali yetu,tunahitaji mabadiliko ya serikali mwaka 2015 ije serikali yenye huruma na kodi zetu sisi wananchi

 

[Abdulhalim]

Tatizo la fraud na mikataba ya ksnge ndio chimbuko la matatizo ya TANESCO, anayepaswa kulipa hiyo decifit ni bodi ya TANESCO, wakurugenzi (wakatwe kwene mishahara na posho ili waone uchungu tunaoupata wavujajasho) na CCM (yes !!). Hawa ndio wanga wetu watz wanaotunyonya damu bila aibu. Msimwamini Muhongo, huyu ni mwongo na sijui ni profesa wa nini, profesa labda wa spins, bosi wake JK baada ya kuchaguliwa 2005 ktk speech yake alisema umeme hautapanda na one month later ukapanda! sasa unaeza ukaona how deep-rooted is this culture of incompetence, stupidity and daylight bull-shitting at cost of mvujajasho. pathetically disgusting/

 

[BAK]

Wanajifanya kama hawalijui hilo Mkuu wakati TANESCO ikizidi kudidimia mwaka hadi mwaka. Ni shirika gani linaweza kujiendesha kwa kuwa na budget deficit ya shilingi 160 Billioni kwa mwezi!!!

Tatizo la fraud na mikataba ya ksnge ndio chimbuko la matatizo ya TANESCO, anayepaswa kulipa hiyo decifit ni bodi ya TANESCO, wakurugenzi (wakatwe kwene mishahara na posho ili waone uchungu tunaoupata wavujajasho) na CCM (yes !!). Hawa ndio wanga wetu watz wanaotunyonya damu bila aibu. Msimwamini Muhongo, huyu ni mwongo na sijui ni profesa wa nini, profesa labda wa spins, bosi wake JK baada ya kuchaguliwa 2005 ktk speech yake alisema umeme hautapanda na one month later ukapanda! sasa unaeza ukaona how deep-rooted is this culture of incompetence, stupidity and daylight bull-shitting at cost of mvujajasho. pathetically disgusting/

 

[Njaare]

Oh my God! Energy sector is under the control of Corrupt, fraudulent, dishonest, fake, immoral, unethical, greedy people. We are finished!

 

[Liame]

Haya ndio mambo ya msingi yanayopaswa kujadiliwa humu ndani lakini nashangaa members wanapita tu kama vile hawaoni jinsi biashara kichaa inayo fanywa na TANESCO kushirikiana na serikali yetu,tunahitaji mabadiliko ya serikali mwaka 2015 ije serikali yenye huruma na kodi zetu sisi wananchi

Nakubaliana na wewe mkuu....nchi yetu inaacha kujadiri issues inabaki kujadiri majungu mara Dr. Slaa ana kadi ya CcM...nguvu za kujadili upuuzi tungeamishia katika kuhoji mambo ya msingi kama afanyavyo Mnyika katika suala la Tanesco Tanzania ingelikua mbali.....mpuuzi nape,wasira mambo kama haya hawayaoni wanabaki kuwa na daydream that CDM itakufa......to hell the leader of this country.....wanastahili kuchomwa moto siku tukipata second independence......

 

[WA-UKENYENGE]

Oh my God! Energy sector is under the control of Corrupt, fraudulent, dishonest, fake, immoral, unethical, greedy people. We are finished!

Smart people are no more using their brain to work for the country but for their stomarch. You can not seriously see a pile rubbish at the white house and keep quiet without trying anything. We are all doing nothing but whistlling in media with hidden names. Just to mentin a few, if private sectors would have been allowed to produce electricity without corruption, afforementioned staffs would naturally diminish. However, the problems remain there in every sector in our country.

 

[ipyax]

Kwa mikataba mibovu kama hii katika sekta ya nishati hatuwezi kupata maendeleo ya viwanda kamwe,,,we need to get rid of ccm in the next election or we wil all get killed economically isipokua kwa mafisadi

 

[KXY]

Govt faces tough moment as power woes loom large

By Florian Kaijage

15th December 2012

Tanesco's total monthly revenue collection stands at Sh90 billion but it spends Sh250 billion to sustain its power generation – a deficit of Sh160 billion.
SOURCE:THE GUARDIAN

Can somebody help us to breakdown the 250 B monthly spending?

 

[chicco]

haya yote tunayataka wenyewe!!!!na hapa tutaendelea kupiga kelele tu kama wehu wakati nchi inaangamia.yaani kuonyesha tulivyo mazuzu watu wamebadili jina tu kutoka dowans kwenda symbion tunachekelea wanavyoendelea kututafuna!!?Profesa anatafuta sifa za kijinga tunamshangilia,kama kweli ni mpambanaji alisaidie shirika kuondokana na mikataba hii ya kidhalimu ili liweze kujiendesha kwa faida.kuna watu huwa wanatuambia ukweli but tunawadharau just bcoz ni threats kwa wateule wetu!!na kwa sababu sisi ni mazuzu na tutaendelea kunyolewa hadi tutie akili!!good day mazuzu wenzangu wadanganyika.

 

[ROBERT MICHAEL]

Tanzania tukiacha kujadili mambo ya watu binafsi na tukajadili mambo yanayoigusa nchi tutafika mbali.mzigo mkubwa waliokuwa nao TANESCO unasababishwa na hao wanasiasa, mikataba waliyoingia na makampuni mbalimbali ambayo haina faida kwa TANESCO mpaka wananchi, na kuhusu huduma zitolewazo na Tanesco ni mbovu kwenda kwa mteja,sidhani kama wanahitaji kuongeza gharama kama wakiongeza gharama kwetu wananchi basi na wote walioingiza tanesco knye hzo gharama wawajibishwe kutokana na sheria ya nchi na serkali nzima ya chama nayo iwajibike hapo ndo tutaona uwajibikaji wa serikali kwa wananchi na sio ziara zisizokuwa na tija ya chama kwa wananchi tunataka uwajibikaji unaonekana.

 

[Abdulhalim]

Wanajifanya kama hawalijui hilo Mkuu wakati TANESCO ikizidi kudidimia mwaka hadi mwaka. Ni shirika gani linaweza kujiendesha kwa kuwa na budget deficit ya shilingi 160 Billioni kwa mwezi!!!

Nchi ya ajabu sana hii mazee. Nazidi kujaribu kujiuliza, kama TANESCO hawazalishi huo umeme kwanini wafanye kazi ya ubroka? kwanini hizo kampuni zisiuze umeme moja kwa moja kwa wananchi ili tuachane na overhead ya hawa brokers wendaazim? Nchi ya ajabu sana hii? Kuna waziri wa nishati wakati hamna investment inayofanyika zaidi ya ubroka/

 

[BAK]

Na huyo Waziri wa nishati tuliambiwa ni kichwa sana kumbe ndio wale wale!!! Sioni tofauti yoyote kati ya huyo Waziri mpya wa Nishati na Ngeleja maana kila sekta iliyo chini ya Wizara hiyo madudu bado ni yale yale tu hakuna ahueni yoyote.

Nchi ya ajabu sana hii mazee. Nazidi kujaribu kujiuliza, kama TANESCO hawazalishi huo umeme kwanini wafanye kazi ya ubroka? kwanini hizo kampuni zisiuze umeme moja kwa moja kwa wananchi ili tuachane na overhead ya hawa brokers wendaazim? Nchi ya ajabu sana hii? Kuna waziri wa nishati wakati hamna investment inayofanyika zaidi ya ubroka/