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Sunday, October 25, 2015

JK relives Richmond scandal, selectively


Outgoing President Jakaya Kikwete yesterday made his strongest and most detailed reflections on the Richmond scandal until now, apparently to cement the CCM presidential campaign by making inroads into the opposition camp, skeptical about the way former prime minister Edward Lowassa was treated regarding the issue. 

Huge crowds attending Lowassa’s campaign rallies had generally accepted his explanation that his conduct was dictated from above, meaning the president was in charge. This was what President Kikwete sought to dispel, reinforcing a now fading position that the then prime minister was fully in control of the matter.

The president reinforced the findings of the parliamentary select committee chaired by Kyela MP, Dr Harrison Mwakyembe, that the premier had sidelined the process of tendering organized by the Tanzania Electric Supply Company (Tanesco).

He similarly admitted that he participated in the preliminary decision that a company to generate 100MW of electricity be contracted, but went on to claim that the process was hijacked by the prime minister who went on to issue a directive to pick a company which did not have the financial or technical capacity to undertake the job.

President Kikwete’s explanation differs from what he told a CCM congress in 2007.

 What the president said at that time is closer to the real picture, and at that time the former premier was still in office, while the controversy was raging and he had remarked on some of his decisions in what was admittedly one of his longest speeches as president and party chairman.

He talked of his refusal to permit the Bank of Tanzania to give a $10million loan to Richmond Development Co., a decision which was the basis for the company’s failure to secure a 100MW plant in time.

Apparently there was no problem with the commercial side of the loan application, but other considerations crept into the issue.

Technically the loan application was perfect, as the company had $15m and needed an additional $10m as down payment for $25m required to obtain the plant, while the rest of the cost would be paid through capacity charges over a period of two years.

As this latter payment was guaranteed by the government, the creditor (BoT) would have no reason to worry about eventual payment, but the president said at his CCM congress speech that they (Richmond) could have obtained the money and just ran away.

His remarks showed that he had accepted the parliamentary version of things - that Richmond Development Co. didn’t exist, which was not entirely the case.

In his remarks at the closure of the CCM presidential campaigns in Mwanza yesterday, the president not only forgot what he told the CCM congress back in 2007 but also brought in a new allegation that was not there in the first place - that the company sought assistance from the Treasury.

In that sense the Bank of Tanzania became the Treasury in his revamped memory, while a bank loan was converted to assistance by the Treasury, which isn’t the same thing. Of the two things, it is the 2007 remarks that remain factually valid, and the Kirumba Stadium reliving of it a bit tired, playing on weak popular memories.

The president also failed to take note of the fact that the decision to award the tender to Richmond, done at the highest levels of the government (cabinet of ministers), had a clear foundation.

Independent Power (T) Ltd that the country had contracted 11 years earlier had a capacity charges regime of 20 years, while Richmond asked for one year, and Dowans raised it to two years, still a tenth of the Malaysian firm’s charges.

Saying that the premier interfered with the Tanesco board fails to notice that another IPTL could have been contracted and some people benefitted by it who then turned against the premier and claimed that he interfered for personal profit? That is yet to be answered.
SOURCE: GUARDIAN ON SUNDAY

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