Kiwira coal power project: Mkapa-Yona: The link gets stronger
THISDAY REPORTER
Dar es Salaam
FORMER president Benjamin Mkapa and senior cabinet minister Daniel Yona together oversaw the formation of Tanpower Resources Company Limited, the private local company holding at least 85 per cent shares in the pending, $271.8m (approx. 340bn/-) Kiwira coal-fired power project in Mbeya Region, it has now been established.
Our investigations have revealed that Tanpower Resources was officially registered on December 29, 2004, when Mr Mkapa was still the sitting president of the United Republic and Yona was the minister in his government directly in charge of both energy sector and mining sector affairs.
At the time of the company's establishment, its first listed directors were the then first lady Mrs Anna Mkapa; the then minister for energy and minerals Daniel Yona; Nicholas Mkapa (the president and Mrs Mkapa's son); Joseph Mbuna (Nicholas Mkapa's father-in-law); and Evans Mapundi.
According to our findings, it was the same company that in mid-2005 secured up to 85 per cent of the shares in Kiwira Coal and Power Limited, a once fully state-owned enterprise that has now entered into a controversial contract with the Tanzania Electric Supply Company Limited (TANESCO) for the supply of 200MW of power to the national grid.
When this shares exchange deal took place, both Mr Mkapa and Yona were still holding their all-powerful positions in the third phase government. The remaining 15 per cent shares in Kiwira Coal and Power Limited were formally retained by the government.
And in what could loosely be construed as 'perfect timing', the takeover bid by Tanpower Resources occurred right in the middle of advanced negotiations between TANESCO and Kiwira Coal and Power Limited for the coal mine to start substantial generation of power for supply to the national grid.
These negotiations culminated in the signing of the increasingly-questionable, 20-year power purchase agreement (PPA) between TANESCO, Kiwira Coal and Power Limited, and the government of the day in March 2006.
Amongst many other things, some stated objectives of Tanpower Resources are to ''carry on the business of miners of coal and iron, to process such coal and iron and generally treat, prepare, render marketable, sell and dispose of such coal and iron or by-products resulting therein in their raw or manufactured state.''
The company was also licensed to ''deal with coal mining in order to generate electricity for consumption and sale; to generate power generators, transmitters and general distributors; and to provide power and general projects management, project appraisers and consultants.''
Mrs Mkapa served on Tanpower Resources' first board of directors through ANBEM Limited, a private company she co-owns with Mr Mkapa in which they are listed as sole shareholders, directors and 'entrepreneurs,' which was formed in 1999 when the couple were still at State House.
Yona is represented in Tanpower Resources through a private company called DEVCONSULT Limited, in which he owns 90 per cent of the shares while his own son, Danny Yona, holds the remaining 10 per cent.
Before being appointed minister for energy and minerals - a position he served until the end of the Mkapa administration in December 2005 - Yona held a number of other key portfolios under the ex-president, including minister of state in the president's office (planning), and minister of finance.
It has also been established that Mr and Mrs Mkapa's son, Nicholas, has his own shares in the same Kiwira and Coal Power Limited company, via Tanpower Resources, through another company going by the name of Fosnik Enterprises Limited.
Records show that Mkapa junior owns Fosnik Enterprises on a 50-50 basis with his wife Ms Foster (Mbuna) Mkapa, while his father-in-law Joseph Mbuna is also one of the shareholders and major figures in Kiwira Coal and Power Limited through yet another company, Choice Industries Limited, which also falls under the umbrella of Tanpower Resources.
Other shareholders of Kiwira Coal and Power Limited company have been identified as Evans Mapundi and Wilfred Malekia through the Universal Technologies Limited company, also under Tanpower Resources.
Interestingly, the companies owned by Nicholas Mkapa and wife (Fosnik Enterprises), father-in-law Joseph Mbuna (Choice Industries), Mapundi and Malekia (Universal Technologies) all share the same postal address - P.O Box 8764, Dar es Salaam.
The government continues to formally hold 15 per cent of the shares in Kiwira Coal and Power Limited.
According to THISDAY's government sources, signs of potentially disastrous discrepancies in the multi-billion shilling contract between TANESCO and Kiwira Coal and Power Limited are now beginning to emerge as delays continue to hamper the still-pending launch of the project � more than 16 months since the signing.
The sources, who are privy to the details of the contract, say there are now growing fears that the deal could eventually turn out to be another expensive trap for the national economy, along the same lines as the infamous 1995 IPTL affair.
They say TANESCO could end up being liable to pay Kiwira Coal and Power Limited a staggering $6m (approx. 8bn/-) each month once the firm starts delivering on the agreed 200MW of electricity, which would bring TANESCO's monthly obligations to three independent power producers (IPTL, Songas and Kiwira) to a figure exceeding $20m (approx. 26bn/-).
According to the sources, this is well beyond the estimated $19.35m (around 25bn/-) per month that TANESCO currently earns from its revenues, and will therefore inevitably necessitate yet another power tariff hike of up to 30 per cent by TANESCO.