Pan African in 32bn/- gas scandal

Parliament has asked the government to recover US$20.1 million (32bn/-) that represents unpaid gas production revenue between 2004 and 2009, for which PanAfrican Energy Tanzania Limited (PAT) has been singled out as the culprit.


PAT is a subsidiary of Orca Exploration Group.

Debating a statement on the natural gas sub sector, Parliament has in addition told the government to ensure that  the company,  many of whose shoddy  dealings were discovered by  a House committee, pays interest  for the money, basing on what they termed as time value for money.

These developments have been prompted by findings of a probe undertaken by the Parliamentary Committee on Energy and Minerals, covering operations of the gas sub-sector as a whole last year.

The conduct of PAT, a firm contracted to drill gas at Songo Songo Island in Lindi Region, featured in the probe, which exposed various irregularities.

Presenting the government’s response on the irregularities, the minister for Energy and Minerals, Mr William Ngeleja, told Parliament that the government had formed  a  negotiating team  to figure out how the colossal amount could be recovered.

Mr Ngeleja said in his 43-page statement that the government had  also engaged the Controller and Auditor General (CAG) to audit the company’s financial management, following its failure to account for another $35.4 million (56.6bn/-).

A member of the House committee for energy and minerals, Mr Charles Mwijage (Muleba North-CCM), said apart from the financial irregularities, PAT was also not transparent in a chain of its other businesses.

Debating the minister’s statement, committee chairman January Makamba faulted the government’s move as non-definitive.

“We want the government to be specific by telling us how long it will take to recover the money. We need to see the end result,” said the outspoken Bumbuli MP on the ticket of the ruling Chama Cha Mapinduzi (CCM).

He added that the Director of Criminal Investigation (DCI) should also  be assigned to mount an  immediate investigation,  to establish whether there  are criminal aspects in the operations of PanAfrican Energy Tanzania.

“What we have learnt from these pathetic revelations is that the nation could be held to ransom by an investor,” Mr Makamba charged.

The legislator also faulted the government for its tendency of not holding investors accountable, under the pretext of creating a conducive investment environment.

“This should not be entertained. If an investor has breached investment agreements, he should be shown the door,” fumed Mr Makamba.

Mr John Cheyo,  the MP for Bariadi East on the ticket of the United Democratic Party (UDP), praised the committee for uncovering irregularities in energy and mining companies.

Mr. Cheyo, who is the chairman of the Parliamentary Committee on Public Accounts (PAC), remarked that recommendations by House sector committees would be highly beneficial if the government took them up seriously.

He expressed misgivings over the appointment of a government negotiating team  for recovering the $20.1million,  expressing doubts on whether the approach would yield the envisaged results.

The legislator stressed that natural resources should be exploited for the benefit of Tanzanians, who should be protected against plunder  with impunity by presumed investors.

Mr Cheyo lamented that it was an acute embarrassment for  Tanzania to be labelled a poor country and to bank on foreign aid,  while it was the third largest gold producer in Africa.

That would not be the case, he argued, if the country’s resources were harnessed effectively and fairly, but were instead exposed to the whims of exploitative foreigners.
Mr Cheyo proposed that the Attorney General should be held answerable for all shoddy agreements that the government had entered with foreign companies.

The shadow minister for Energy and Minerals, Mr John Mnyika (Ubungo  - Chadema),  was pessimistic on whether the government would pin PanAfrican Energy Tanzania Limited effectively, to facilitate recovery of the money in question.

Mr Mnyika cited a recommendation by relevant parliamentary committees on the Richmond power scandal in 2008, which the government has not implemented to-date.

He said the government should plug all loopholes on tax evasion by energy and mining investors that use offshore companies.
Source: The Citizen,www.thecitizen.co.tz, reported by Lucas Liganga in Dodoma

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