Tanzanian Association Oslo

Proposed Dowans deal:

More questions raised

over issues of legality

THISDAY REPORTER 
Dar es salaam

-Meanwhile, the TANESCO managing director, Dr Idris Rashidi, yesterday cancelled an abruptly convened news conference in Dar es Salaam. 

-Journalists were called to TANESCO headquarters at Ubungo at around 3 pm, where Rashidi was to address the media. 

-After waiting for almost four hours, the journalists were told by officials from the public utility’s public relations department that the news conference has been cancelled for ’’reasons beyond the TANESCO chief’s control.’’ 

-It could not be immediately established what Rashidi planned to say at the news conference, or why the event was cancelled at the 11th hour. 

LEGAL experts in the country have strongly criticized controversial plans by the government and state-run Tanzania Electric Supply Company Limited (TANESCO) to purchase power turbines from Dowans Tanzania Limited, saying such a move would be outright illegal. 

Both Mabere Marando and Damas Ndumbalo, two seasoned Dar es Salaam-based lawyers, slammed TANESCO and the Ministry of Energy and Minerals for their relentless pursuit of the Dowans buyout deal in separate interviews with THISDAY. 

Both of them pointed out that any such move at this stage would be in direct contravention of a valid court injunction currently in place. 

The court injunction was issued by the High Court’s commercial division last November in favour of TANESCO, which had sought to restrain Dowans from selling its power turbines to a third party pending determination of an ongoing arbitration process involving the two (TANESCO and Dowans). 

According to Marando, the latest decision by both TANESCO and its parent ministry to once again vigorously pursue the deal - despite widespread public criticism strongly suggested a hidden agenda. 

He suggested the whole issue has been politically motivated from within the ruling Chama Cha Mapinduzi (CCM), in a bid to raise campaign funds for the upcoming 2010 general elections. 

’’This is a project purely hatched by some people in CCM and the government,’’ he declared. 

The city lawyer further noted that the proposed Dowans deal had all the hallmarks of several other known scandals, including the national identity cards tender process and the Bank of Tanzania (BoT) external payment arrears (EPA) account embezzlement. 

Marando said he believes that, when all is said and done, TANESCO and the energy and minerals ministry will succeed in their campaign to purchase the used turbines from Dowans ’’because of the extraordinary pressure they are exerting to conclude the deal soon.’’ 

But he expressed fears that most of the funds from government coffers earmarked for the transaction are likely to be embezzled by a few individuals. 

’’I also find it strange that this issue wasn’t discussed when President Kikwete met officials from TANESCO and the ministry recently,’’ he added, saying the silence being maintained by top national leaders on the issue could be interpreted that the government as whole is in favour of the dubious plan. 

Meanwhile, Ndumbalo said he was astonished that TANESCO could even consider buying the Dowans turbines while it has successfully applied for a court injunction to block the sale. 

It is understood that close to a dozen bidders had shown interest to purchase the turbines after the company initially invited offers last year. 

Ndumbalo also argued that it would be illegal for TANESCO to buy the Dowans turbines because the original power purchase contract between the two was inherited from the fraudulent Richmond Development Company LLC. 

He criticized the recent decision by Dowans to challenge the court injunction against the sale of its turbines, saying there are no legal grounds for that. 

According to Ndumbalo, there can be no credible sale agreement between TANESCO and Dowans unless and until the private firm withdraws its arbitration proceedings against the public utility currently under way in Paris. 

The Speaker of the National Assembly, Samwel Sitta, earlier this week blasted the proposed plan by TANESCO and its parent ministry to buy the Dowans machinery, saying such a deal would be a major rip-off. 

He cautioned the government against endorsing the plan, stressing that it would be scandalous for the state to buy the used power turbines offered by Dowans instead of going for brand-new power generators directly from reputable manufacturers. 

He noted that the 90bn/- (more than $60m) earmarked for the purchase of the Dowans turbines presently lying idle at Ubungo in Dar es Salaam, was enough to import brand-new 100MW turbines from abroad. 

Sitta said he was astounded to see TANESCO and the ministry jointly pushing for the Dowans deal so strongly, given the obvious links between Dowans and Richmond. 

This Day