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Tanesco fraudsters to end up in court

Saturday November 24 2012
tanesco hq

Tanesco headquarters in Dar es Salaam. Photo/FILE

Tanzania is set to prosecute individuals implicated in massive fraud at the state energy firm, and sack managers involved in questionable deals, in line with investigators’ recommendations.

A report of a forensic audit at the Tanzania Electric Supply Company Ltd (Tanesco) was handed to the government last week, with the recommendation that those involved be brought to justice.

The investigation revealed multiple cases of suspected fraud in procurement of goods. In one case in which a local firm linked to a local businessman secured a tender worth $850 million, the money was paid out but the firm did not honour its part of the deal.

READ: Probe unearths flawed tenders, deals at Tanesco

Under the tender, the firm was to supply high tension transmission wires, generators and electricity transformers over several years, but was paid after only half the stipulated period had expired.

The businessman was also paid Tsh1,963,520,000 ($1.5 million) to supply 2,000 eucalyptus overhead transmission poles treated with tanalith C, only to supply 40 poles worth Tsh39,270,000 ($24,873).

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In another case, some $54 million paid by the government for purchase of fuel for the Independent Power Tanzania Ltd (IPTL) plant in Dar es Salaam may have been stolen in a racket involving Tanesco employees and senior officials in the Ministry of Energy and Minerals, as the fuel was never supplied.

A container deal

And between 2010 and 2012, a 40-foot container of new transformers worth $5 million was procured, but on reaching Tanesco headquarters, it was transferred to an iron bar making factory to be sold as scrap, only to be rejected by the factory owner.

The investigation, commissioned by the government in July this year, was conducted by the National Audit Office (NAO) and a private international audit firm, Ernst & Young.

Their brief was to undertake a forensic audit by screening the Tanesco accounts and procurement process.

Ludovick Utouh, Controller and Audit-r-General, said the NAO team was given 60 days to complete the audit and submit its report.

The investigators have also recommended the sacking of Tanesco managers involved in the suspicious transactions.

Felchesmi Mramba, acting director general of Tanesco, told The EastAfrican that a number of employees had already been sacked while more would be prosecuted for the fraud.

The revelations of massive fraud risk alienating donors who provide budgetary support to the country.

In November last year, Tanesco sought a go-ahead from the Energy and Water Utilities Regulatory Authority (Ewura) to increase tariffs by 155 per cent. 

The authority approved a 40.29 per cent increase.

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