Energy and Water Utilities Regulatory Authority (EWURA)
The parliament should continue pressing for access by its members to all contracts signed between the government and private investors in the extraction of natural resources to get rid of the problems that shroud the mining sector in the country.
According to the Chairman of Energy and Water Utilities Regulatory Authority Consumer Consultative Council (EWURA-CCC), Professor Jamindu Katima, most of the problems with contracts signed between the government and private firms in the extractive industry emanate from secrecy.
“These contracts are top secret which not even parliament can access easily,” said Prof Katima who is also the Principal of College of Engineering and Technology of University of Dar es Salaam.
He said all contracts in the gas subsector need to be reviewed if proved to be faulty as was the case with Pan African Energy which faces accusations of evading taxes in the tunes of billions of shillings while inflating prices of gas supplied to Tanzania Electric Supply Company (TANESCO).
Apart from Songas and Pan African Energy, others companies extracting and supplying natural gas include Canadian Wentworth Resources and French Morel & Prom which are operating at Mnazi Bay in Mtwara region.
“Lawmakers should continue to press the executive so that they can access all contracts and where necessary review them,” the Nobel Laureate said. Prof Katima who is a 2009 joint Nobel Laureate argued that Songas Limited may have signed another bad contract with Tanzania Petroleum Development Corporation which needs to be reviewed as its power tariffs to Tanesco are also excessive.
The don however warned against any attempt to undo such contracts. “I do not support severing such contracts because experience has shown that it becomes twice a burden to the public,” he pointed out naming Dowans Holdings Limited as the latest example.
Lawmakers enraged by Pan African Energy’s tax avoidance tactics which denied government over 20.1 million US dollars (approx. 31.9bn/-) in the past five years advised the executive to sever the contract with the local company which is a subsidiary of Virgin Island based, Orca Exploration.
Minister for Energy and Minerals, William Ngeleja said Pan African Energy is yet to explain a 35 million US (approx. 55.4bn/-) anomaly discovered in the company’s accounts books.
“The Ministry has decided to forward the matter regarding PAT to the government negotiating team to discuss with the investor on the outstanding amount,” Mr Ngeleja told the House after a probe team established that the company has been cheating on taxes.
Last year, ActionAid Sweden accused PAT of tax avoidance to the tune of 65 million US dollars (over 103bn/-) between 2004 and 2011. ActionAid Sweden censured Swedish International Development Agency for investing in PAT using Swedish taxpayers’ money despite the fact that the company is denying the government billions of shillings in taxes which affects budget allocation to key social sectors including education.
”PanAfrican Energy has escaped taxes totaling US$65 million in Tanzania since 2004. US$65 million would allow 175,000 girls to attend school in Tanzania,” the international activist group which also fights for equal opportunity to education among girls and boys in poor countries, said in its report. Local PAT officials have denied any wrongdoing.
By FINNIGAN WA SIMBEYE, Tanzania Daily News