CAG: 6.8bn/- wrongly dished out to Dowans
THISDAY REPORTER
Dar es Salaam
The controversial Dowans Tanzania Limited was wrongly paid a staggering $4,865,000 (approx. 6.8bn/-) under dubious circumstances, the latest audit report by the Controller and Auditor General (CAG) has revealed.
The newly-released CAG report for the 2007/08 financial year uncovered the anomaly in the financial records of the state-owned Tanzania Electric Supply Company Limited (TANESCO).
It is stated that TANESCO paid Dowans the amount as reimbursement for costs incurred by the private company in airlifting electric power generation equipment and accessories to Dar es Salaam.
However, the CAG report notes that the government and TANESCO made the huge payment to Dowans without actually being contractually obliged to do so.
According to the auditors, Dowans invoiced TANESCO on November 17, 2006, demanding reimbursement of $4,865,000 spent to bring in three electric power generation turbines and other consumables and accessories for its emergency power plant in Dar es Salaam.
The audit report says TANESCO's management acknowledged that the payment was made under an agreement reached by the negotiation team comprising government and DOWANS company representatives.
''However, minutes of the negotiation meetings do not categorically state whether the stated amount is subject to be paid, and by whom,'' says part of the audit report.
''...It appears that the amount was wrongly paid by the government,'' the report adds.
It further requests TANESCO to either justify the payment, or recover the wrongly-paid amount.
In its previous audit report, the CAG found that Dowans had failed to commission at full capacity of 100MW power generation on the agreed commercial operation date.
TANESCO was thus advised by government auditors to ensure payment of liquidated damages with interest.
However, the latest CAG audit report notes that the recommendation has not been implemented by TANESCO.
Dowans inherited the power generation contract from the equally-dubious Richmond Development Company (RDEVCO) LLC under mysterious circumstances.
Dowans was later slapped with a $10,000-per-day penalty notice for failing to beat the power generation deadline.
The penalty led to Dowans owing the government an accumulated fine of $2,430,000 (approx. 3.4bn/-).
The government was forced to terminate the power purchase agreement with Dowans following revelations that fraud was committed in the contract.
A parliamentary probe committee chaired by Kyela member of parliament Dr Harrison Mwakyembe came to the conclusion that the Richmond/Dowans deal was fraudulent, hence rendering it null and void.
Several prominent public figures were implicated by the scathing parliamentary probe report in connection with the Richmond scandal.
They included the then prime minister, Edward Lowassa, cabinet ministers Nazir Karamagi and Dr Ibrahim Msabaha, and Igunga member of parliament Rostam Aziz.
Lowassa, Msabaha and Karamagi were all forced to resign their government posts as a result of the report's findings.
The government's procurement watchdog � the Public Procurement Regulatory Authority (PPRA) � also slammed the Richmond/Dowans deal as fraudulent