The new South African management of the Tanzania Electric Supply Company (TANESCO) caused some surprise on June 11 by issuing a 21-day ultimatum to its customers to settle over Shs 100 billion in outstanding bills. Otherwise they would be disconnected. TANESCO Managing Director Rudi Huysen thanked the 70% of TANESCO customers who paid their bills promptly. Only 10% of Tanzanians had electric power. Others would have to wait a long time to be connected if people refused to pay for the supplies they were receiving.
The South African team had finally entered TANESCO head office on 17th May after protracted resistance from employees who wanted to get their terminal benefits before it took over. The new management has a two-year mandate to Improve TANESCO services before divestiture.
On April 29 President Mkapa had railed against the previous management saying it had failed to deliver, and that was why the government had decided to contract a foreign firm to run the company. The President noted that the decision was accelerated by revelations arising from audits carried out by three renowned international firms which had revealed gross mismanagement and misappropriation within the state-owned company. In the six years from 1995 to 2000 the company had recorded an aggregate loss amounting to more than Shs 125 billion. Another audit company, KPMG Consulting, revealed in its report that 36 per cent of revenue from the pre-paid (LUKU) meter system did not feature in any of the company reports since 1995. The KPGM auditors also revealed that since 1995 the TANESCO Board of Directors had approved tenders worth 5.6bn/-, which were beyond its powers to sanction. The KPGM report also accused the TANESCO management of failure to command revenue collection, poor management of company assets, funds misappropriation and power leakages which could have been contained. President Mkapa further quoted the report as saying that TANESCO did not know the actual number of its customers and that those who featured in its computerised system differed from the number of connected electricity users. “This means that a good percentage of electricity users have been using power without paying a single cent, since they were not being billed,” he said. He conceded that, as of November last year, government had also owed TANESCO some Shs 42 billion.
On July 3 power to the Tanzania Peoples Defence Forces (TPDF) and the Dar es Salaam Water Authority (DAWASA) was cut off. They promptly paid part of their outstanding bills. On 15th July TANESCO disconnected power to hundreds of houses in Zanzibar including those owned by government institutions and departments allegedly for not paying outstanding debts amounting to Shillings 31 billion. Following the success of this programme (people were queuing in TANESCO offices to settle their bills) the company was planning to embark on a campaign against people who have connected electricity to their houses illegally.