by SAUMU MWALIMU
(The US company Symbion Power is into power engineering and construction. It is currently enjoying the benefits of work in Afghanistan and Iraq awarded to it by the US Congress, under the program called Iraq Relief and Reconstruction Fund (IRRF), and in Africa by the US President Barack Obama. Ed.)
Cash-strapped Tanzania Electric Supply Company (Tanesco) will end the exorbitant emergency power supply contracts that cost the state corporation over Sh26 billion every month, it has been confirmed.
Energy minister Sospeter Muhongo and Tanesco managing director Felchesmi Mramba told The Citizen on Sunday separately that the contracts will not be renewed upon their expiry in October 2014.
The decision not to renew the contracts has come at a time when Tanesco is struggling to avoid slipping into bankruptcy due to mounting debts.
The power utility firm is also facing mounting criticism from consumers who are lamenting about the recent 40 per cent electricity cost hike despite its unsatisfactory services. The new prices take effect from January.
According to the company’s board of directors, ending US Company Symbion Power and Glasgow-based Aggreko contracts will save Tanesco Sh25 billion per month.
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In an interview with this reporter, Prof Muhongo was quick to explain that the move would not hurt the government’s commitment to continue working with the two firms to address the power sector challenges.
“The correct position is that the contracts will run their full course and are not being ended as has often been reported. Tanesco is planning how to handle the situation by October 2014,” the minister said.
He dismissed fears that the move could jeopardize bilateral relations with US or Scotland, especially after US President Barack Obama pegged his Power Africa project on private sector players like Symbion.
Engineer Mramba also clarified that Tanesco is not completely ceasing work with Symbion, saying the US firm has long-term interests to develop the sector in the region.
The Citizen for more