Tanzania Electric Supply Company
(Tanesco) has asserted that they pay 5.2 million US dollars (about
8.3bn/-) a day for generating electricity using diesel and Heavy Furnace
Oil (HFO).
In this case, the company needs 81.27
per cent tariff hike to 359/- a unit or run into bankruptcy.
But a consultant, AF-MERCADOS of Spain,
hired by Energy and Water Utilities Regulatory Authority (EWURA)
reported that this year the state-power utility deserves an increment of
29.49 per cent.
The consultant argues that Tanesco needs the increment,
which equals to 253/- a unit and 4.96 per cent for next year, 0.9 per
cent in 2014 and finally 8.64 per cent in 2015.
Acting Tanesco Managing Director Mr
Felchesmi Mramba told the stakeholders meeting that sat to deliberate on
the tariff that without the suggested hike, the company would make a
loss of 800m/- next financial year. “The increment will only assist us
to improve services but the company will not make a profit at all,
merely a break even,” Mr Mramba pleaded.
The Acting MD added: “The proposal to
the government to scrap off oil taxes and loan guarantee were not
implemented while rains were not enough therefore we need tariff raise.”
Mr Mramba noted that the consultant’s assumptions were not realistic as
had overestimated ‘plant factor’ generation capacity and Tanesco had
increased oil-to-electricity generation dependency.
For instance, he said, due to drought
the firm had lost 350MW that was produced using hydro-plants while the
consultant has put on the high side electricity from these sources and
undermined oil plant.
According to the consultant in the next
three years, Kidatu expects to generate 88 MW (but actual according to
Tanesco is 20 MW), Mtera 54 MW (12.5 MW), Kihansi 15 MW (25 MW) and
Pangani System 40 MW (21 MW). Ubungo One gas plants is expected to
generate 85 MW (84 MW), Ubungo Two 95 MW (35 MW), Tegeta 87 MW (81 MW).
“These figures are not right since there is neither enough water nor gas
to produce electricity,” Eng. Mramba said, adding that by the end of
October, Tanesco owed suppliers 250 million US dollars (about 400bn/-).
The Consultant also proposed automatic
tariff adjustment in case of high inflation,fluctuation and global oil
price increment every six months in order to ease Tanesco’s balance
sheet burden.
Confederation of Tanzania Industries (CTI) representative
Hussein Kamote said the entire move to push tariff any inch up was not
supportive, since at the moment the country’s power bills are on the
higher side compared to the other countries in the region.
‘This will make our industrial goods
uncompetitive in the region and at the end of the day it will dwarf the
sector entirely,” Mr Kamote said. He added that: “Automatic adjustments
are not thinkable since there is no mechanism that would force Tanesco
to lower tariffs when inflation goes down or in case the shilling
appreciates.”
A Temeke resident, Mr Othman Omar Othman
said Tanesco was not supposed to be awarded another power tariff raise
as service delivered was not corresponding with the last increment.
Another Ilala resident wondered why Tanesco want to take an expensive
commercial loan instead of the government, the owner of the company, to
float a bond.
(Tanesco) has spent the last 12 months
chasing government guarantee instead of persuading the government to
float a long tenure bond, which costs less than a bank loan. The company
does not have money yet it wants an expensive capital,” the resident
said.
He also advised EWURA to use social
networks - facebook and twitter - as a media of collecting views instead
of website which few, especially those using Smartphone can access.
The
yesterday turnover was very poor. In January, this year, Tanesco
proposed a 155 per cent tariff increment but ended up getting only 40.29
per cent which was temporary pending the proper scientific analysis of
the appropriate amount to be raised.
Source: The Daily News, www.dailynews.co.tz, reported by Abduel Elinaza in Dar es Salaam
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