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Tanesco in drive to recover $190m in debt
By JOSEPH MWAMUNYANGE
Posted Saturday, August 18 2012 at 17:43
In Summary
Thousands of people and institutions could end up in court as the cash-strapped Tanzania Electric Supply Company embarks on a countrywide exercise to curb power thefts and recover $190.5 million owed by power consumers.
Executives at the power utility said the firm was planning to bring court actions against defaulters to strengthen its weak cash position, which has left it unable to pay its debts.
"Our financial position isn't good. We have warned customers who owe us a lot of money to pay up or face court action. We also plan to crack down on theft of electricity," said Tanesco public relations manager Badra Masoud.
Tanzania's Criminal Procedure and Civil Procedure Codes allow Tanesco to attach properties of defaulters.
The parastatal needs at least Tsh1 trillion ($635 million) to stabilise its cash position and offer reliable services, according to a recent report submitted by the company to the Energy and Water Utilities Regulatory Authority.
At least 21 per cent of the 850 MW generated is being stolen or lost through technical problems in the distribution line. This is far above the internationally accepted rate of 12 per cent.
However, electricity supply in the country is not a major issue for investors, as recent projects have added more power to the national grid, with the country attempting to switch from reliance on hydro-power by using gas sourced locally to generate electricity.
The new projects, funded from the Millennium Challenge Account, have ensured sufficient supply and eliminated rationing, a common trend in some of the East African countries.
Tanzania's electricity tariffs are relatively low compared to those of other East African countries. But investors complain about the unreliability and quality of electricity.
Tanesco acting managing director, Felchesni Mramba, has given defaulters two weeks to pay up before the crackdown starts. The electricity supplier's offices will remain open on Saturdays to give more people a chance to pay up.
Tanesco currently collects Tsh70 billion ($44.4 million) to Tsh80 billion ($50.8 million) every month, but new Minister for Energy and Minerals Prof Sospeter Muhungo is emphatic that the utility must collect all pending bills, which would enable it pay debts totalling Tsh308 billion ($104 million).
The bulk of Tanesco's large debtors are companies, factories and institutions.
In his address to Parliament, the minister mentioned prominent institutions that were "stealing power" as including St Mary Schools and Access Bank.
Tanesco says the crackdown will be different from the half-hearted exercises customers have become accustomed to.
"If a customer is found to have bypassed, tampered with, or cut the seal off the meter or made illegal connections by using unauthorised technicians, they will be heavily penalised," warned Ms Masoud.
In addition, the culprits' names will be published in the media. "This will be done regardless of what station, position, status they hold, so that the general public is made aware of the saboteurs in their midst. We shall then take them to the police and ultimately the courts," said Ms Masoud.
Journalists will be invited to witness the crackdown on electricity thieves while police will provide security for the electricity firm's staff as they conduct the raids.
Tanesco in drive to recover $190m in debt
By JOSEPH MWAMUNYANGE
Posted Saturday, August 18 2012 at 17:43
In Summary
- Executives at the power utility said the firm was planning to bring court actions against defaulters to strengthen its weak cash position, which has left it unable to pay its debts.
- The parastatal needs at least Tsh1 trillion ($635 million) to stabilise its cash position and offer reliable services, according to a recent report submitted by the company to the Energy and Water Utilities Regulatory Authority.
- At least 21 per cent of the 850 MW generated is being stolen or lost through technical problems in the distribution line. This is far above the internationally accepted rate of 12 per cent.
- The bulk of Tanesco's large debtors are companies, factories and institutions.
Thousands of people and institutions could end up in court as the cash-strapped Tanzania Electric Supply Company embarks on a countrywide exercise to curb power thefts and recover $190.5 million owed by power consumers.
Executives at the power utility said the firm was planning to bring court actions against defaulters to strengthen its weak cash position, which has left it unable to pay its debts.
"Our financial position isn't good. We have warned customers who owe us a lot of money to pay up or face court action. We also plan to crack down on theft of electricity," said Tanesco public relations manager Badra Masoud.
Tanzania's Criminal Procedure and Civil Procedure Codes allow Tanesco to attach properties of defaulters.
The parastatal needs at least Tsh1 trillion ($635 million) to stabilise its cash position and offer reliable services, according to a recent report submitted by the company to the Energy and Water Utilities Regulatory Authority.
At least 21 per cent of the 850 MW generated is being stolen or lost through technical problems in the distribution line. This is far above the internationally accepted rate of 12 per cent.
However, electricity supply in the country is not a major issue for investors, as recent projects have added more power to the national grid, with the country attempting to switch from reliance on hydro-power by using gas sourced locally to generate electricity.
The new projects, funded from the Millennium Challenge Account, have ensured sufficient supply and eliminated rationing, a common trend in some of the East African countries.
Tanzania's electricity tariffs are relatively low compared to those of other East African countries. But investors complain about the unreliability and quality of electricity.
Tanesco acting managing director, Felchesni Mramba, has given defaulters two weeks to pay up before the crackdown starts. The electricity supplier's offices will remain open on Saturdays to give more people a chance to pay up.
Tanesco currently collects Tsh70 billion ($44.4 million) to Tsh80 billion ($50.8 million) every month, but new Minister for Energy and Minerals Prof Sospeter Muhungo is emphatic that the utility must collect all pending bills, which would enable it pay debts totalling Tsh308 billion ($104 million).
The bulk of Tanesco's large debtors are companies, factories and institutions.
In his address to Parliament, the minister mentioned prominent institutions that were "stealing power" as including St Mary Schools and Access Bank.
Tanesco says the crackdown will be different from the half-hearted exercises customers have become accustomed to.
"If a customer is found to have bypassed, tampered with, or cut the seal off the meter or made illegal connections by using unauthorised technicians, they will be heavily penalised," warned Ms Masoud.
In addition, the culprits' names will be published in the media. "This will be done regardless of what station, position, status they hold, so that the general public is made aware of the saboteurs in their midst. We shall then take them to the police and ultimately the courts," said Ms Masoud.
Journalists will be invited to witness the crackdown on electricity thieves while police will provide security for the electricity firm's staff as they conduct the raids.
