Tanzania: Govt Revokes New Power Tariffs Set By Regulator

Posted on :Tuesday , 3rd January 2017

Dar es Salaam — The government yesterday revoked new electricity tariffs, only a day after they were announced by the regulator-- Energy and Water Utilities Regulatory Authority (Ewura).

 
Energy and Minerals minister Prof Sospeter Muhongo took the unprecedented action in a letter ordering Ewura to shelve the planned increase in the cost of power supply.
 
The letter dated December 31 and addressed to Ewura director general Felix Ngamlagosi would come as a surprise to many, and also suggests a working disharmony among the various arms of the United Republic government.
 
The Citizen gathers that Chief Secretary John Kijazi was due to make the announcement on the cancellation but did not appear on TV as suggested. Instead, the official letter by the minister was leaked out and circulated widely, including on social media.
 
Prof Muhongo's letter seen by The Citizen was copied to President John Magufuli.
 
According to the letter, the minister says the new tariff structure would not take effect until the government receives and reviews a formal report on the matter from Ewura.
 
"In accordance to the Electricity Act, 2008 and to the responsibilities of the minister of energy and minerals, Ewura is today, Saturday, 31st December 2016, ordered to stop the utilization of the new tariff structure that was announced, by Ewura, yesterday, 30th December 2016 till when the government has thoroughly and carefully considered the formal report it will receive from Ewura," read the letter.
 
Prof Muhongo asked Ewura to inform all stakeholders of the decision.
 
The U-turn immediately threw social media into a frenzy last night as the letter was circulated in groups, drawing various comments and reactions from users. Prof Muhongo was accused of playing politics with a sensitive national issue.
 
During the 8pm news bulletin the minister gave two other reasons why the price hike plan was unfeasible.
 
According to Prof Muhongo, he had also been taken aback by the move by Ewura to raise the tariffs.
 
He said he had not been made aware before the agency's chief executive announced the formal plan that was due to take effect today.
 
Most newspaper editions of yesterday splashed the news of the rise on the cost and labelled it the first economic suffering of the New Year.
 
Analysts and consumers quoted in the reports warned the prices would make life more difficult and also hinder attraction of investors looking for cheap alternatives. Some reports referred to a past interview in which the minister vowed there would be no more hike in power tariffs as long as he was in charge.
 
In the short interview with TBC, Prof Muhongo said the public had been vehemently opposed to any plan to raise the tariff during the process to collect their views as required.
 
"I was also perturbed by the news yesterday. As minister, I have not received any reports from Ewura to show why the new price. I would suggest you as them on what basis was the decision to raise the price taken," said Prof Muhongo.
 
"Tanesco and Ewura both know what is ailing Tanesco and its management. They should not deflect their real problems" he said, without revealing them, even though President Magufuli and the minister have in the past blamed corruption and exorbitant costs of servicing contracts by independent power producers as among the reasons Tanesco has been performing poorly.
 
Efforts last night to get Ewura or Tanesco officials for comment were futile.
 
Ewura on Friday announced a 8.5 per cent rise in tariffs, continuing a recent trend in which consumers have had to shoulder higher electricity costs. Tanesco had applied for an 18.19 rise to reportedly break even.

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