The crisis in Tanzania’s power sector has worsened during recent months due to a combination of very low water levels in hydropower dams because of poor rains, failures of generators and suspicions that contracts with suppliers of generating equipment may not have been above board. As a result, power rationing became serious for industry and other consumers and this affected revenue receipts and the viability of businesses. TANESCO was plunged into a financial crisis after its power generating costs went up dams produced well below capacity. To solve the problem, it switched to thermal generation, which is expensive to run.
At one stage President Kikwete said nobody should be blamed for the crisis as it was all an act of God ‘who is testing us’. CHADEMA Chairman Freeman Mbowe, said he was surprised that the President was attributing the crisis to God. He said it was due to carelessness of state officials and leaders who had entered into dubious contracts. He called upon Kikwete to admit that it had been a mistake to enter into agreements with several overseas companies including part Malaysian firm IPTL, an American firm called Richmond Development company, the gas to electricity programme Songas and also Net Group Solutions.
On October 20 the new Minister for Energy and Minerals, Nazir Karamagi, said that he had been surprised to learn that the Mtera hydro-power plant had come to a standstill despite TANESCO’s statement that it had enough water to go on for 21 more days. There was a feeling that this was a sabotage plot within the corporation.
In an urgent attempt to ease the situation the Government hastily bought a $172 million generator to add 100 megawatts to the National Grid from Richmond but there were long delays in delivery which mad the crisis worse. MP’s began to seriously question the government with special focus on the allegedly dubious tender awarded to Richmond – Mwananchi.
Then CHADEMA called upon Kikwete to appoint a commission of enquiry into the crisis as there seemed to be some ‘private interest’ involved in the whole thing. The party’s Secretary General, Wilbroad Slaa, noted that the importation of generators has become ‘big business’ in the country – Nipashe.
According to East African Business Week (October 30) the Breton Woods Institutions and domestic private sector had prepared a five-year financial recovery plan to salvage TANESCO from its financial crisis. The recovery plan required a capital investment of some $1billion to recapitalise the company following a long period of non-investment in the sector.
Minister Meghji commented that unless problems in the energy sector were solved, no economic growth rate could be attained.
On November 3 China announced that it would assist Tanzania with generators to help in the production of electricity by using coal to be mined at Kiwira in Mbeya Region.