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- Oct 5, 2007
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Energy and Minerals minister, William Ngeleja yesterday criticised Tanzania Electric Supply Company Ltd (Tanesco) legal department for incompetence which has contributed to endless contract disputes with power investors.
"Tanesco legal department is incompetent," said the minister and called for its restructuring during a meeting with Tanesco workers and management in Dar es Salaam yesterday.
Citing controversial contracts such as the ones with Dowans and Independent Power Tanzania Ltd (IPTL), the minister said the firm's legal department has completely failed to assist Tanesco to efficiently negotiate contracts with investors.
Ngeleja proposed restructuring the department with a view to building its contract negotiation capacity and competence in representing the company in court.
According to the minister, talks on the restructuring process had started between the ministry and Tanesco managing director. The main focus, he noted, is to boost the capacity of the department in following up cases and settling legal and related disputes facing Tanesco.
He faulted the company for lack of creativity, and urged management to adopt modern modules to resolve operational and administrative problems currently facing Tanesco.
The minister advised the management to utilise the skills of private competent experts and professionals in running the company."While it is important to use these experts, they should not be turned into private managers running company affairs," said Ngeleja.
He said that Tanesco needed to welcome the private sector as the government can hardly develop the company, single-handedly. He said he had been receiving complaints from private players interested in investing in the power sector that Tanesco was not willing to accommodate them.
"They are saying that instead of helping them, Tanesco staff are discouraging them," he added.
He also dismissed suggestions that the government pump more capital into Tanesco, saying the amount of money needed to implement Tanesco programmes was beyond what the government could provide.
"We cannot do that alone. That's why we propose joint ventures or investor-owned power projects in enhancing effective implementation of Tanesco's strategic power programmes," said Ngeleja.
For his part, the Tanesco Managing Director, William Mhando promised his company would also tackle the issues outlined by the minister.He said the company had short-term projects worth 4bn/- and others worth 20bn/- which it could not facilitate alone.
"Time has come for all stakeholders to support government initiatives aimed at solving long-term Tanesco problems in collaboration with the private sector," he stressed.
Minister's criticism against Tanesco legal department comes a day after the government agreed to pay USD 65.8m equivalent to 94bn/- to the owners of Dowans Holdings SA and Dowans Tanzania following the ruling of the International Court of Arbitration.
It has also agreed to pay Richmond Development Company Limited USD 50,000 (about 75m) for defamation according to minister Ngeleja.
Ngeleja told a press conference on Thursday that the monies for Dowans and Richmond would be paid by Tanesco.
He said there were two charges according to the International Court of Arbitration ruling, saying in the first one, Tanesco would pay 94bn/- to Dowans, but that the amount would attract a 7.5 per cent interest rate charges if Tanesco delayed payment
"Tanesco legal department is incompetent," said the minister and called for its restructuring during a meeting with Tanesco workers and management in Dar es Salaam yesterday.
Citing controversial contracts such as the ones with Dowans and Independent Power Tanzania Ltd (IPTL), the minister said the firm's legal department has completely failed to assist Tanesco to efficiently negotiate contracts with investors.
Ngeleja proposed restructuring the department with a view to building its contract negotiation capacity and competence in representing the company in court.
According to the minister, talks on the restructuring process had started between the ministry and Tanesco managing director. The main focus, he noted, is to boost the capacity of the department in following up cases and settling legal and related disputes facing Tanesco.
He faulted the company for lack of creativity, and urged management to adopt modern modules to resolve operational and administrative problems currently facing Tanesco.
The minister advised the management to utilise the skills of private competent experts and professionals in running the company."While it is important to use these experts, they should not be turned into private managers running company affairs," said Ngeleja.
He said that Tanesco needed to welcome the private sector as the government can hardly develop the company, single-handedly. He said he had been receiving complaints from private players interested in investing in the power sector that Tanesco was not willing to accommodate them.
"They are saying that instead of helping them, Tanesco staff are discouraging them," he added.
He also dismissed suggestions that the government pump more capital into Tanesco, saying the amount of money needed to implement Tanesco programmes was beyond what the government could provide.
"We cannot do that alone. That's why we propose joint ventures or investor-owned power projects in enhancing effective implementation of Tanesco's strategic power programmes," said Ngeleja.
For his part, the Tanesco Managing Director, William Mhando promised his company would also tackle the issues outlined by the minister.He said the company had short-term projects worth 4bn/- and others worth 20bn/- which it could not facilitate alone.
"Time has come for all stakeholders to support government initiatives aimed at solving long-term Tanesco problems in collaboration with the private sector," he stressed.
Minister's criticism against Tanesco legal department comes a day after the government agreed to pay USD 65.8m equivalent to 94bn/- to the owners of Dowans Holdings SA and Dowans Tanzania following the ruling of the International Court of Arbitration.
It has also agreed to pay Richmond Development Company Limited USD 50,000 (about 75m) for defamation according to minister Ngeleja.
Ngeleja told a press conference on Thursday that the monies for Dowans and Richmond would be paid by Tanesco.
He said there were two charges according to the International Court of Arbitration ruling, saying in the first one, Tanesco would pay 94bn/- to Dowans, but that the amount would attract a 7.5 per cent interest rate charges if Tanesco delayed payment
