Consumers blast Tanesco for 'unending' tariff hikes

A cross-section of Dar es Salaam residents on Tuesday condemned consistent tariff hikes by the Tanzania Electric Supply Company (TANESCO), describing the utility firm as a poor service provider and proposing the entry of private players in power generation and distribution.

The interviewees asked the government to invite private firms to compete with TANESCO the way it is done in the communications sector to ensure sustainable and cost effective power supply as opposed to the current situation in which power charges are going up without any improvement in services.

A vehicle spares shop owner in Kariakoo, Mr Juma Khamis, noted that despite the fact that TANESCO were awarded a 40 per cent tariff increase early this year, electricity supply remained inconsistent, especially in the main business areas where owners resorted to generators.

"This is becoming a little too much on TANESCO part; how sure are we that once the tariff has been granted we will indeed receive uninterrupted power supply? What the government should do is bring in the private sector. Maybe a little competition would do the trick," Mr Khamis hoped.

Ms Jocelyn Kimario, who owns and operates an African clothes line, said although TANESCO needed the money to operate, the utility company has for some time not been providing uninterrupted power supply to the public.

She explained that the private sector, which also includes small entrepreneurs, rely on consistent power supply for production.

"So with interrupted power, we are not able to reach our targets, hence incur huge losses of money, and now that TANESCO wants to increase prices, how are we even sure they will stick to what they say," wondered Ms Kimario.

The utility company is seeking to increase the current electricity tariffs of 197.81 per unit to 332.06 per unit, representing an increase of 67.87 per cent.

Early this year, the Energy and Water Regulatory Authority (EWURA) granted the utility company a 40 per cent increase of tariff less than six months of assessment, when it sought to increase the tariffs by 155 per cent.

Retired social scientist, Mr Herman Metili, said TANESCO should stop looking for simple answers for complicated matters, adding more than 40 per cent of electricity is lost due to poor condition of transmission lines should be addressed adequately.

"Frequent increase of tariffs will not solve the problem. This is a burden on power consumers. In some countries like Kenya, their counterparts have proposed lowering the tariffs to maximize production and keep inflation under control. High tariffs will trigger inflation," Mr Metili observed.

Mwanza-based economist Halima Bakari questioned the rationale of focusing on power generation from expensive diesel and forgetting about coal, which the country is endowed with.

"In South Africa, more than 90 per cent of power production comes from coal. Why is it that we (Tanzanians) only opt for short term costly solutions instead of making serious investment in power projects like coal? Again the ash from coal can produce cement.

The energy sector needs some additional seriousness rather than tariff increase shortcuts," Ms Bakari observed.

A former TANESCO employee, Mr Hemedi Maulid, described as genuine common claims that illegal power connections were rampant in Dar es Salaam and across the regions and appealed for investigations.

"Lack of patriotism among some officials is a burden to Tanesco. Some of the expenses encountered are unnecessary because cheating is permitted especially with large-scale industrial consumers.

But no serious measures have been taken. These are individual projects which are allowed to siphon the resources for others to bear the burden," Mr Maulid lamented.        

At a public hearing of its application to raise power tariffs in Dar es Salaam on Friday last week, the power utility firm said the country should brace for an indefinite power rationing if its request for hiking electricity tariffs by 67.87 per cent is not approved.

TANESCO argues that operational costs are higher than the revenue collected partly because the thermal power, that has enabled the country to avoid power rationing, is expensive.Tanesco buys emergency thermal power at 50 US cents per kilowatt hour and sell the same at 12 US cents creating losses that accrue to enormous debts to the company.

The company spends an average of 5.4 billion (USS$ 3.3 million) a day on fuel to produce 365 megawatts of electricity from emergency power plants. Its total daily revenue is just 2.34 billion ($ 1.4 million).

Senior TANESCO officials say due to operational costs, its losses have increased from 43.23bn/- in 2011 to 178.25bn/- in 2012.
Source: Daily News, reported from Dar es Salaam, Tanzania
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