The parliamentary Parastatal Organisations Accounts Committee (POAC) has urged the government to expedite installation of a Jacobsen power plant by Tanzania Electric Supply Company (Tanesco) to save the utility firm from having to pay a whopping 64.2bn/- a year to Independent Power Tanzania Limited (IPTL).
The remarks were made by POAC chairman Kabwe Zitto in the House yesterday when tabling his committee's report for the financial year ending June 30, 2010.
He said Tanesco was facing serious financial problems owing to the burden of having to buy power from private companies.
He cited IPTL which Tanesco pays some 64.2bn/- a year, saying such huge costs were making the company to accumulate loses every year.
“For instance, the company got a loss of 47.3bn/- in the financial year 2009/2010, ending up raising power rates to the customers.
“We would want the company to stop buying power from private companies soon after
its new Jacobsen plant starts operating,” stressed Zitto.
He said the committee had always urged the government to invest heavily in power production, but nothing had been done so far.
The chairman advised the government to prioritise proposed public power projects in order to have the right balance between private and public investments in the sector.
The committee also observed that it was difficult for Tanesco to run its operations successfully when it failed to collects debts from customers - including the government.
In another development, Tanesco and other public institutions were faulted for ignoring the Public Procurement Act and its regulations.
Zitto told the House yesterday that many of the problematic areas in public institutions involved poor application of the procurement Act and its regulations.
Citing an example, Zitto said Tanesco was one such company which abused the procurement Act, saying it made procurements amounting to between 300bn/- and 600bn/- without following procurement procedures.
“In the financial year 2009/2010, Tanesco made procurements valued at 258bn/-. This is a huge some of money. It is proper for legal measures to be taken when such matters arise,” said Zitto.
Tanesco audit report as per December 2010 shows that the company spent 1.8bn/- and 65m/- which was earmarked for the rehabilitation of a dock at Mtera dam.
“This increased cost of rehabilitating the dock is so high and the committee was not satisfied with the rehabilitation work undertaken at Mtera dam and we have ordered internal investigation on the cost increase,” he said.