BAK
JF-Expert Member
- Feb 11, 2007
- 124,790
- 288,005
New revelation: Dowans in huge debt
-Controversial turbines named as collateral for massive loans from Barclays, Stanbic banks
THISDAY REPORTER
Dar es Salaam
THE controversial Dowans Tanzania Limited company is carrying a massive debt resulting from loans received from various commercial banks to the total amount of $75m (over 100bn/-), THISDAY can reveal today.
Our investigations have established that the loans were secured by registered company assets including the 100-megawatt power generation turbines that the state-run Tanzania Electric Supply Company (TANESCO) has been trying to purchase through its parent government ministry.
Documents seen by THISDAY show that during 2007, Dowans was awarded several loans worth a total of $55m from Barclays Bank alone, and another $20m from Stanbic Bank.
In May 2007, a debenture in favour of Stanbic Bank Tanzania Limited was taken out, under which all present and future assets of Dowans Tanzania Ltd - both movable and immovable were placed under mortgage for the loan.
A month later (June 2007), Dowans initially secured a loan of $20m from Barclays Banks Mauritius branch, and five months later, landed another credit line of $5m - this time from Barclays Bank Tanzania Limited.
Again, the company put up its registered assets as collateral.
Yet another certificate of indebtedness shows that Dowans secured another loan of $30m from Barclays Bank in November 2007.
It could not be immediately established if either the TANESCO Managing Director Dr Idris Rashidi or the Minister for Energy and Minerals, William Ngeleja, were aware of these debts when vigorously pursuing their bid to pave the way for a government purchase of the companys used turbines at an astronomical price of $60m (approx. 90bn/-).
However, the fact that Dowans still has such debentures in place with a number of banks could have further complicated any deal for the purchase of the turbines presently sitting idle in Ubungo, Dar es Salaam.
According to the certificates of indebtedness signed by Dowans, the company acknowledges its debts with each of the banks for specified sums of money, on all of which interest is due until the principal amounts are paid back.
Going by these latest findings, it is clear that if the dubious plan to buy the Dowans power turbines had succeeded, someone 'either TANESCO or the government' would have ended up inheriting these colossal debts.
Although Rashidi announced last week that the public power utility had abandoned the controversial plan to buy the Dowans machinery, the whole issue appears to have ignited a heated public debate that shows few signs of cooling down any time soon.
Somewhere at the centre of the debate is the Kigoma North Member of Parliament Zitto Kabwe (CHADEMA), who has raised many an eyebrow in publicly backing the Dowans turbines purchase proposal in his capacity as chairman of the parliamentary public corporation accounts committee.
The opposition legislator, who has steadily built up a reputation as a refreshingly maverick and strong-minded politician, has even found himself at direct loggerheads with fellow MPs, notably members of the parliamentary energy and minerals committee which had already vetoed the proposal.
The Speaker of the National Assembly, Samwel Sitta, has also made his position clear as strongly opposed to the proposed Dowans deal, pointing out that it would effectively revive the nationally-embarrassing Richmond scandal saga of last year.
The Speaker minced no words in cautioning the government against getting itself involved in such a deal.
-Controversial turbines named as collateral for massive loans from Barclays, Stanbic banks
THISDAY REPORTER
Dar es Salaam
THE controversial Dowans Tanzania Limited company is carrying a massive debt resulting from loans received from various commercial banks to the total amount of $75m (over 100bn/-), THISDAY can reveal today.
Our investigations have established that the loans were secured by registered company assets including the 100-megawatt power generation turbines that the state-run Tanzania Electric Supply Company (TANESCO) has been trying to purchase through its parent government ministry.
Documents seen by THISDAY show that during 2007, Dowans was awarded several loans worth a total of $55m from Barclays Bank alone, and another $20m from Stanbic Bank.
In May 2007, a debenture in favour of Stanbic Bank Tanzania Limited was taken out, under which all present and future assets of Dowans Tanzania Ltd - both movable and immovable were placed under mortgage for the loan.
A month later (June 2007), Dowans initially secured a loan of $20m from Barclays Banks Mauritius branch, and five months later, landed another credit line of $5m - this time from Barclays Bank Tanzania Limited.
Again, the company put up its registered assets as collateral.
Yet another certificate of indebtedness shows that Dowans secured another loan of $30m from Barclays Bank in November 2007.
It could not be immediately established if either the TANESCO Managing Director Dr Idris Rashidi or the Minister for Energy and Minerals, William Ngeleja, were aware of these debts when vigorously pursuing their bid to pave the way for a government purchase of the companys used turbines at an astronomical price of $60m (approx. 90bn/-).
However, the fact that Dowans still has such debentures in place with a number of banks could have further complicated any deal for the purchase of the turbines presently sitting idle in Ubungo, Dar es Salaam.
According to the certificates of indebtedness signed by Dowans, the company acknowledges its debts with each of the banks for specified sums of money, on all of which interest is due until the principal amounts are paid back.
Going by these latest findings, it is clear that if the dubious plan to buy the Dowans power turbines had succeeded, someone 'either TANESCO or the government' would have ended up inheriting these colossal debts.
Although Rashidi announced last week that the public power utility had abandoned the controversial plan to buy the Dowans machinery, the whole issue appears to have ignited a heated public debate that shows few signs of cooling down any time soon.
Somewhere at the centre of the debate is the Kigoma North Member of Parliament Zitto Kabwe (CHADEMA), who has raised many an eyebrow in publicly backing the Dowans turbines purchase proposal in his capacity as chairman of the parliamentary public corporation accounts committee.
The opposition legislator, who has steadily built up a reputation as a refreshingly maverick and strong-minded politician, has even found himself at direct loggerheads with fellow MPs, notably members of the parliamentary energy and minerals committee which had already vetoed the proposal.
The Speaker of the National Assembly, Samwel Sitta, has also made his position clear as strongly opposed to the proposed Dowans deal, pointing out that it would effectively revive the nationally-embarrassing Richmond scandal saga of last year.
The Speaker minced no words in cautioning the government against getting itself involved in such a deal.
