Parliament has summoned Tanzania Development Corporation (TPDC) officials to a meeting next week in a new bid to have the government disclose 26 agreements it has signed with foreign oil and gas exploration companies and audit them amid concerns that companies may use secrecy to inflate recoverable costs.

Production Sharing Agreements (PSAs) stipulate that capital and operational costs incurred by companies would be paid back to the companies, but the parliamentary Public Accounts Committee (PAC) said only four agreements out of the 26 signed have been audited and the Controller and Auditor General (CAG) report established that one company had inflated the costs by $26 million.

Zitto Kabwe, the committee chairman told The EastAfrican that President Jakaya Kikwete erred in saying that it was upon parliament and the government to agree on the modality to release the agreements.

Mr Kabwe said that Tanzania needed to release the agreements since countries such as Mozambique and Sierra Leone, which emerged from civil wars, have released commercial agreements entered with exploration companies.

“The idea that releasing the commercial agreements would expose commercial secrets is wrong; the companies want the contracts to remain secretive in Tanzania but disclose them to their shareholders in their countries. The government should know that a shareholder holding in one major oil exploration company holds shares in its competitor,” Mr Kabwe said. 

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However, government sources said that the government will not disclose the agreements for fear that the decision would hamper future exploration negotiations with foreign companies.

TPDC had promised that it would release the agreement on its website last December but this was not done. 

However, President Jakaya Kikwete said in his address to the nation on the escrow scandal that releasing the agreements would be tantamount to releasing commercial secrets to their competitors but said parliament and the government should agree on ways the agreements could be released.

But government sources said the government was worried that releasing the information would be disadvantageous, companies would want to negotiate a low deal.

However, experts have called the president’s assertion unconstitutional and urged MPs regardless of their political affiliation to hold the government to account for the decision and seek to protect public resources from being misused.

 Sources said that Pan African Energy which has been involved in a tax evasion dispute with the government was the only company that had agreed to release its terms with the government but the rest of the companies had rejected the decision and requested the government to gazette such a decision.

 Gazetting the decision would be binding in the sense that Tanzania Revenue Authority (TRA) would be unable to shift goal posts when it comes to issues such as seeking to tax the companies on items already exempted from taxation in the PSAs.

“Despite the exemptions, TRA and politicians would want the companies to pay the taxes, saying the decision to make the exemptions was only made by the ministry of energy, not the entire government,” the sources said.

Parliament also asked the government to review all power contracts entered by Tanesco and independent power producers. They made the resolution after noting that many of the contracts were against the state-owned company which pay high capacity charges.

Lawyers Environmental Action Team director Dr Rugemeleza Nshala said the constitution gives mandate to parliament to review and ratify all agreements entered between the government and foreign companies therefore the president’s assertion was in breach of the constitution.

He further said that parliament was underusing their constitutional mandate of holding the government to account and MPs had resorted to protecting their personal interests.

“The constitution calls for the proper use of resources and you cant claim that the resources are used properly if you don’t make the exploration contracts public. There is no secrecy in exploration. and The parliament has the mandate of holding the government and the president against such decisions,” Dr Nshala said.