Tanesco pulls out of talks on new deal with Symbion

Mesothelioma Survival Rates About 40 percent of patients with mesothelioma survive the first year after diagnosis. That survival rate depends on many factors, including age, cancer stage, cancer type, race and gender. Tanzania Electric Supply Company (Tanesco) has terminated talks on a new long­term contract with Symbion Power Tanzania Ltd.

In Summary 

Tanesco has communicated its decision in a letter to Symbion Power, effectively ending the US­based firm’s lucrative partnership with the Tanzanian public utility. Symbion has been generating and selling power to Tanesco, in addition to building power transmission lines.

Dar es Salaam. Tanzania Electric Supply Company (Tanesco) has terminated talks on a new long­term contract with Symbion Power Tanzania Ltd. Tanesco has communicated its decision in a letter to Symbion Power, effectively ending the 5/27/2016 Tanesco pulls out of talks on new deal with Symbion ­ News | 

 US ­based firm’s lucrative partnership with the Tanzanian public utility. Symbion has been generating and selling power to Tanesco, in addition to building power transmission lines

Tanesco managing director Felchesmi Mramba says in the letter dated May 4, this year, that the decision to end the talks on a power production agreement (PPA) follows a directive issued by the government.

“You will recall that Tanesco and Symbion were negotiating a long­term power purchase agreement, which would have been executed subsequent to issuance of necessary approvals from the government and other relevant authorities. Tanesco is in receipt of categorical directives from the government to suspend execution of the intended PPA on any party thereof as from the date of this letter. We wish to inform you that Tanesco has formally withdrawn from being a party to the intended PPA,” Mr Mramba says in the letter, whose copy was seen by The Citizen. 

Yesterday, no Tanesco officials reached by The Citizen was willing to discuss the matter. Contacted for comment, Energy and Minerals minister Sospeter Muhongo referred us back to Tanesco. Symbion Power’s Senior Vice President for Public Affairs and Communications, Mr Adi Raval, confirmed he was aware of the development, and accused Tanesco of violating an agreement not to reveal contractual matters.

 “Symbion is aware of these reports and that confidential documents have been leaked to the press. We have supplied power to Tanzania for five years without a hitch and in all these years, we have never discussed the details of our legally valid contracts involving Tanesco….the position remains the same,” Mr Raval told The Citizen yesterday from Washington. The development appears to stem from displeasure voiced recently by government leaders, including President John Magufuli, about the huge sums Tanesco pays independent power producers (IPPs). 

While launching the construction of the second phase of the Kinyerezi gas­driven power plant in Dar es Salaam, President Magufuli directed Tanesco not enter into new agreements with IPPs. He said the contracts were skewed in favour of power producers at the expense of cashstrapped Tanesco. 

Presenting the Energy and Minerals ministry’s 2016/17 budget in Parliament last week, Prof Muhongo said the ministry was working towards self­reliance in power generation to end dependency on IPPs.

Symbion Power had agreements with Tanesco to operate power plants in Dar es Salaam, Dodoma and Arusha. It could not be immediately established when its current contracts run out. Tanesco currently spends at least $16.76 million ((Sh36.6 billion) per month in capacity charges paid to a handful of IPPs. Symbion alone is paid $1.866 million, $2.25 million and $2.69 million every month through selling electricity to Tanesco in Arusha, Dodoma and Dar es Salaam, respectively.

 Under conventional power purchase agreements, payments for capacity are made whether or not electricity is actually generated by the privately­owned power firms.

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