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Tanesco spends over 5bn/- on subsidies

Discussion in 'Biashara, Uchumi na Ujasiriamali' started by BAK, Feb 3, 2010.

  1. BAK

    BAK JF-Expert Member

    Feb 3, 2010
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    Tanesco spends over 5bn/- on subsidies

    By Patrick Kisembo

    3rd February 2010

    [​IMG] Each worker given 750 units of power monthly for 3,500/-

    Minister for Energy and Minerals, William Ngeleja

    Cash-strapped Tanzania Electric Supply Company (Tanesco) spends over 5bn/- per year in subsidizing electricity units for its employees as an incentive, The Guardian has learnt.

    A survey conducted by this newspaper has established that every employee at Tanesco receives 750 electricity units worth 3,500/- every month.

    This means that a Tanesco employee buys a unit at 4/67 compared to an ordinary consumer who pays between 118/- and 128/- for a unit of power.

    Each Tanesco worker is therefore, entitled to 9,000 units of electricity annually at 42,030/- only, while an ordinary consumer pays 1,080,000/- for the same number of units per year.

    Sources within the company confirmed to The Guardian that every employee was getting 750 units of electricity monthly at 3,500/-.
    “We are given the units as bonuses, but it is limited to one house. If you have other houses, then you have to buy power for them at normal prices,” said one source.

    The sources further said that couples working at the company were getting 1,500 units per month.

    According to sources, the number of Tanesco employees countrywide was nearly 5,000 by December, last year, each of whom was entitled to the units.

    Asked whether or not the 750 power units the company was providing to its employees was part of Tanesco’s policy, the Minister for Energy and Minerals, William Ngeleja advised this reporter to seek the response from Tanesco board chairman, deputy board chairperson or Tanesco CEO.

    When contacted, Tanesco Acting Executive Director, Eng. Stephen Mabada declined to comment, only saying: “This is Tanesco’s week. Let’s write what is happening during the week.”
    Pressed further, Mabada said: “Just go and write.”

    The power utility announced on Monday that its accumulated losses had been reduced from 186bn/- in 2006 to 22bn/- in 2008.
    Tanesco has to a large extent continued to rely on subsidy, especially for investment financing, due to prolonged power shedding, which has affected its revenue base.

    The company requested the government to provide 312bn/- from its 2009/2010 budget to enable the company implement emergency projects aimed at reducing annoyance to the customers.

    In the 2007/2008 financial year, the government announced that it would no longer subsidise the company’s operations, saying it would only guarantee funds Tanesco borrowed from international financial institutions for investment.

    The Vice chairperson of the Parliamentary Parastatal Organization Accounts Committee (POAC), Estherine Kilasi (CCM – Mbarali) said her committee was not aware of the matter.

    She further said that the committee had gone through the 2008 audited report but the issue was not mentioned at all.
    “Maybe they will bring it up next year when we are going through the 2009 audit report, but as of now, we do not know anything,” she said.

    She however, said private companies used to audit paratastals and would later send audited reports to the Board of Directors of a responsible institution.

    Renatus Mkinga who is Executive Director for Action Development Forward wondered why Tanesco was granting such incentives at a time when it was facing financial problems and not producing surplus electricity.

    “I think the initiative was copied from the South African power firm, the Electricity Supply Commission (ESCOM), which provides subsdised units as incentives to its employee from surplus electricity,” said Mkinga.

    He noted that for the last 10 to 15 years, the company had been providing its employee with 300 to 400 units, but said raising these to 750 units was unacceptable, especially when the company is struggling financially.

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