Tanzania: $3bn needed to develop Mchuchuma, Liganga

The Mchuchuma coal project is facing financial constraints to generate electricity.

The government is unable to provide funds as it is required to undertake the project.

Mchuchuma is estimated to have 540 million tonnes of coal deposits, which are enough to produce 600MW for over 100 years.

The cost for Mchuchuma and Liganga iron ore mining projects are $3 billion which will be sourced in partnership between the government — through the National Development Corporation (NDC) — and China’s Sichuan Hongda Corporation Ltd.

The Chinese firm has an 80 per cent stake while the government — through NDC — controls a 20 per cent shareholding.

 NDC board chairman Chrisant Mzindakaya said in Dar es Salaam yesterday that the corporation had been receiving only about 10 per cent of its annual budgets, a development that delays all the major projects that the industrial development and promotion organisation is required to undertake.

Faced with a serious budget deficit, NDC has been able to only implement its projects by 10 per cent.

“This means every project has been implemented by only 10 per cent,” Mr Mzindakaya, who has been re-appointed to be the NDC board chairman, told Industry and Trade minister Abdallah Kigoda.

Mr Mzindakaya said for three consecutive financial years —2011/12, 2012/13 and 2013/14 — NDC received only 15.4 per cent, 23.2 per cent and 10.8 per cent of its budgets respectively.

“In 2011/12 out of Sh33.8 billion sought, Sh7.1 billion was approved and only Sh5.2 was disbursed. The following year, the organisation requested about Sh29 billion, but more than Sh8 billion was approved and only about Sh7 billion was released,” he said.

In the current financial year, NDC sought Sh49 billion, but only Sh20 billion was approved and only Sh4.2 billion has been disbursed so far.

Apart from Mchuchuma and Liganga projects, NDC is also tasked with implementing Katewaka and Ngaka projects, chemical industries like Engaruka Soda Ash, General Tyre East Africa, Biolarvicides in Kibaha, Maganga Matitu Iron Ore and the Singida Wind project.  Dr Kigoda, who keenly followed  Mr Mzindakaya’s speech, later said the government was committed to supporting NDC to fulfill its responsibilities.

“The government is still working on certain issues including the new NDC Act…it is also seeks to revive the capital of the organisation so that it executes its projects properly,” said Dr Kigoda.

He called upon the new board  to come up with ways of getting capital without depending directly on the government.

“This is because the government’s demands exceed its capacity,” he said.

Mr Mzindakaya promised the minister that all the big projects under NDC would be implemented by the new board in its term of three years
Source: The Citizen, reported by Felix Lazaro, from Dar es Salaam, Tanzania
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