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New Tanesco power tariff back-breaking

New Tanesco power tariff back-breaking

 Such a massive increase would be a bitter pill to swallow for many ordinary citizens.  Some parents might suffer from stroke when time to send children back to school or home when time for holidays came. 

Would thousands of Wachagga happily travel to their home villages at Christmas for "kisusio" soup, roast lamb and pampering by loving relatives? Only a few super-rich who need to occasionally tend to their luxury mansions hidden in Lushoto, Kibosho or under the slopes of Mount Meru will travel come rain or sunshine.

Any Mhehe or Mbena thinking of going back home to taste "ulanzi" or "komoni" the traditional beers of Iringa would have to put such plans on the back burner for the foreseeable future.

Those with vehicles would think twice before embarking on an expensive upcountry trip. Filling up a 60-litre tank would cost 300,000/-. Prices for essential foodstuffs, medicines, nyama choma, beer and soft drinks would shoot through the roof.  Landlords would raise rents to the level of current salaries. The economic ripples would extend into every part of the sea of life in which ordinary Tanzanians swim daily.  There would probably be riots on some streets of Arusha, Mwanza and Dar es Salaam if not in the whole of Tanzania mainland.

A trader or service provider who needs to increase prices of goods or services by 155% ought to be dead or in intensive care, like seriously ill patients in Muhimbili going through organ failure during a strike by medics.   This is what Tanesco was trying to do recently. Where did Tanesco get the guts to demand 155% increase for electricity charges? The energy regulatory authority EWURA only authorised a 40% increase.

Still, is the sudden 40% increase acceptable and palatable? Judging by the strong reactions by Tanzanians of every walk of life it is not. If transportation and food prices went up by 40% tomorrow and not 150% which I outlined earlier, what will consumers do? Many people would skip meals. And many more might choose to walk to their workplace.

People might be more likely to accept higher charges when services are really good. What are electricity consumers likely to get for the 40.29% tariff hike? The usual Tanesco inefficiency in the installation and maintenance of electricity supplies will probably continue. Or the same slow response to emergencies like fallen power lines, blown up of transformers and power blackouts.  Will Tanesco staff long crippled by cheap electricity from their mother company agree to pay the new rates like every other citizen? 

The MD stated on TV that the condition imposed by EWURA to force employees to pay is difficult to implement because Tanesco's contracts with staff assures them of free power. For 50 years they have not been paying.  We want them to pay now? A company that is not making a profit but instead incurring massive losses should trim its fat. All their vehicles should be in a pool during office hours and safely parked at Tanesco headquarters at national, zonal or provincial levels.

Spending billions of shillings on 4WD vehicles which are driven mostly on tarmac in cities is sheer management madness of sorts. Renovating and equipping houses of top Tanesco executives with modern furnishings may be an investment into the future but cannot serve the interests of many Tanzanians at present. Tanesco executives should live modestly.  How much money does Tanesco spend on meetings and travel in a calendar year? The CAG should look into this.  Why should the public pay for inefficiency and excessive expenditures?

 A public company whose operation touches on the lives of so many Tanzanians must be scrutinised to the highest degree and made to conform to the highest efficiency of its operations. Even if procurement takes a year, Tanesco should buy its own emergency generators instead of hiring.  By so doing, they would not have to pay capacity charges.

Tanesco should borrow from the World Bank or other low interest source to procure own generation equipment.  The money the company would save from not paying capacity charges to private power producers like IPTL and Songas could be used to partially pay off such a loan.

There are thousands of young entrepreneurs who have taken bank loans to finance small businesses.  Many of their businesses depend on the availability of uninterrupted and affordable electricity to make furniture, run food kiosks, repair vehicles, mechanical and electrical appliances, or simply to operate tailoring shops.

How will business owners cope when energy bills double?  Just do the math.  If they were paying say 20,000 shillings per month for electricity, now they will have to pay 20,000 X 140%, plus the usual 18% VAT and 4% REA/EWURA. That works out to about 34,362/-.  They will be paying about 40,000/- if we add 5,000/- monthly service charge.

If you were paying 200,000/- per month before, you should expect to pay almost 400,000/- from now onwards.  Otherwise you must reduce your electricity usage significantly.  Are individuals and companies ready to go on electricity diet? How will ministries and government departments cope with the increase when their budgets were approved eight months ago based on the old rates?

Rents will surely go up even if honourable Makamba manages to push his private bill for regulating rents passed in parliament.  Maybe we will experience 12-hour blackouts like in 2011. In that case electricity consumption will go down automatically. The 40% power tariff increase is likely to kill businesses and significantly affect livelihoods. This massive hike of electricity tariffs may prove to be the last straw that breaks Tanesco's back.

tnaleo@hotmail.com; cell +255-713-246-136


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