Govt shelves new power tariffs hike?


JF-Expert Member
Feb 11, 2007
Govt shelves new power tariffs hike?

-New rates did not take off on Jan. 1 as scheduled, as Mainland, Zanzibar officials still mulling over possible repercussions

Dar es Salaam

THE government has caught a case of cold feet over implementation of the 21.7 per cent power tariffs hike by the Tanzania Electric Supply Company Limited (TANESCO), despite recently getting a go-ahead for the move by the industry regulator, it has been revealed.

Well-placed sources say officials of both the Union and Zanzibar Governments have expressed misgivings that the power tariffs raise could have a serious backlash at this time when rising inflation is already exacerbating the cost of living throughout Tanzania.

The government wants to avoid the possibility of a political backlash if the new tariff rates are enforced, since the majority of Tanzanians are already complaining about the rising costs of living, a senior government official told THISDAY.

High-level government officials from both sides of the union are currently in consultations over how to deal with this potentially serious situation, the official added.

Other government sources also confirmed that senior officials from the Ministry of Energy and Minerals and the Zanzibar Ministry of Water, Works, Energy and Lands have already met with Energy and Water Utilities Regulatory Authority (EWURA) representatives to discuss the new tariffs and their likely effect on the people.

The state-run TANESCO has been pushing for a 40 per cent power tariff hike and significant increase in connection charges to meet its power generation costs. However, EWURA scaled this proposal down to a 21.7 per cent tariff raise, which was to have become effective from January 1 this year (last Tuesday).

Now, the latest reports of new and ongoing high-level consultations even after EWURAs final approval appear to have added an entirely new twist to the power tariff issue.

The World Bank and the International Monetary Fund (IMF) have been heaping pressure on the government to ensure TANESCO is run profitably and reduces its dependency on state subsidy.

When contacted for comment, TANESCO board chairman Ambassador Fulgence Kazaura directed our queries to the management of the power utility.

However, TANESCO managing director Dr Idris Rashidi and officials of the Ministry of Energy and Minerals were not immediately available for comment yesterday on the latest developments in what is shaping up to become quite a long-running saga.

Apart from approving the power tariffs increase, EWURA also gave TANESCO the greenlight to increase power connection charges from 66 to 215 per cent.

Meanwhile, the industry regulator now wants TANESCO to conduct a detailed study determining the level of technical and non-technical losses on its systems.

EWURA gave the state power company until September 30 this year to complete a comprehensive costs-of-service study, fully identifying the components of its cost of delivery.

Beginning this month, TANESCO is also required to submit quarterly reports to EWURA comprising monthly electricity purchases, own generation and optimization of hydro-thermal mix.
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