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Richmond/Dowans saga continues

Discussion in 'Jukwaa la Siasa' started by BAK, Apr 27, 2009.

  1. BAK

    BAK JF-Expert Member

    Apr 27, 2009
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    Tanesco wants court to bar Dowans from...

    2009-04-27 10:08:08
    By Hellen Mwango

    Dowans Tanzania Limited has filed an objection in the Dar es Salaam’s High Court (Commercial Division) seeking dismissal of application by the Tanzania Electric Supply Company (Tanesco) to restrain it from selling its assets.

    Through Amicus Attorneys’ law firm, Dowans filed the objection recently that the application lodged by Tanesco is incompetent on grounds that it was filed under wrong provision of law.

    Information on the filed objection shown to this reporter by a source said the grounds of the objection would be heard by Judge Robert Makaramba through written submissions.

    Advocate Abduel Kitururu from the law firm will file his submissions tomorrow, April 28, while Dr Alex Nguruma, who is defending Tanesco will reply on May 6 and rejoinder if any, will be filed on May 8. The court is scheduled to deliver the ruling on May 13.

    In the application, Tanesco Limited wants the court to restrain Dowans from selling its plants described as 120MW 50HZ Thermal Power Plant, General Electric 4x20MW Dual fuel and 1x40MW Natural Gas in any manner whatsoever.

    Tanesco are seeking the restrain orders pending determination of a dispute between the parties filed by Dowans before the International Court of Arbitration according to submissions in an agreement for Emergency Power Supply.

    In the alternative, Tanesco wants Dowans Company to deposit in court 10 per cent of USD 109,857,686 as security for performance of any award of costs that may be entered against them on conclusion of the arbitration proceeding.

    On June 23, 2006, Tanesco entered into Emergency Power Supply Agreement with Richmond Development Company LLC (RDEVCO), which assigned its contractual rights to Dowans Holding SA. Thereafter, Dowans Holding assigned its duties to its subsidiary company, Dowans Tanzania Limited.

    It is alleged that after review of the agreement and irregularities in the agreement, on June 30, last year, Tanesco wrote to Dowans stating that decommission of the plants, the subject of the agreement was void.

    On November 20, last year, Dowans filed arbitration proceedings before the International Court of Arbitration in Paris, France, claiming USD 109,857,686, as unpaid capacity charges and damages.

    In reaction, on December 11, last year, Tanesco filed an application for extension of time to reply to arbitration proceedings, but before conclusion of the litigation, Dowans invited bids for purchase of its Thermal Power Plant.

    The act leading to the disposal of assets subject of the arbitration proceedings was intended to obstruct the execution of any award of costs that may be passed against Dowans upon conclusion of proceedings thereby causing loss and damages to the applicant.

    It is alleged further that Tanesco has been subjected to huge expenses on account of advocate’s fees and costs of the arbitration. The estimated fees for each of the three arbitrators range between USD 73,956 and 337,520.

    Just last month, Tanesco, bowed to public pressure and withdrew a controversial and hotly debated plan to purchase the used power generators from Dowans. Tanesco managing director Dr Idris Rashid said his firm had left the future of the country’s energy supply in the hands of ‘wananchi,’ warning that prolonged blackouts were inevitable.

    He said Tanesco’s withdrawal decision was reached after his management had seen “too much politics involved in the matter,” pointing an accusing finger at some politicians, including Members of Parliament, for issuing false and unfounded statements to just scuttle the plan.

    The largely unexpected comments by Dr Rashid came hardly a day after National Assembly Speaker Samwel Sitta warned both the government and Tanesco against embracing the plan to buy the Dowans generators.

    Sitta’s warning followed statement by Tanesco that “the company sees no solution to the looming power crisis other than buying the used Dowans gas-propelled turbines now lying idle at Ubungo in Dar es Salaam.”

    Dowans and Tanesco entered into the contract after the Richmond Development Company LLC failed to generate 100 MW as stipulated in a June 23, 2006 pact, signed after hydropower generation dams ran dry following a prolonged drought.

    Before the contract was revoked, Dowans had been pocketing 183m/- a day in capacity charges through a dubious power generation deal that generated a heated debate inside and outside the National Assembly.

    The move to purchase Dowans gas turbines was vehemently opposed by several MP, notably Kyela legislator Dr Harrison Mwakyembe and his Nzega counterpart, Lucas Selelii, both from the ruling CCM.

    The two lawmakers were key players in a parliamentary select committee formed last year to probe the Richmond Development Company LLC scandal, leading to the resignation of the former Prime Minister Edward Lowassa and senior cabinet ministers Nazir Karamagi and Dr Ibrahim Msabaha.

    SOURCE: Guardian