Ministers clash as Dowans` payments ignite new scandal
2nd December 2012
After the Treasury minister deflected inquiries to the Energy and Minerals portfolio holder, Professor Muhongo told reporters that he works in a programmed manner, not just responding to events.
Inquiries follows a build up of uncertainty on suspected dubious use of funds in payments of costs of continuing litigation set by courts in the United Kingdom while the Tanzanian authorities continue to contest the decision in the TANESCO-Dowans dispute.
The money amounting to $ 126 million is said to have been issued by the government in an unexplained manner, whether it covers payments of $ 65 million supposed to be paid for breach of contract with Dowans Inc., or entirely for legal costs in the continuing case in the UK.
John Mnyika, Ubungo MP (CHADEMA) and Shadow Minister for Minerals and Energy disclosed in Mwanza city during an M4C rally for his party, said that $ 65 million was statute payment ordered by the court to be given to Dowans Inc., after its victory against Tanesco for breach of contract.
He said the government was required to that money and wind up the case, but it lodged a petition in protest against the payment ruling, but up to now the government has used approximately $ 126 as total continuing costs for the pursuit of the pending litigation.
Finance minister Mgimwa declared himself to be ‘unconcerned’ about the matter, directing the issue to his Energy and Minerals counterpart, Professor Muhongo.
The latter declined to answer questions over the phone, saying he prefers to work on urgent issues facing the ministry and not continuing discussing what he termed as a seasonal and perennial issue.
TANESCO has appealed over the matter to the Court of Appeal seeking to annul the award to Dowans, but the government as sole shareholder in TANESCO is under obligation at the UK court to conduct due diligence in relation to costs of the case.
Preliminary hearing on the case has been set by the Court of Appeal for Wednesday December 5, cited as case number 142 of 2012 and will be heard by a panel of three judges, namely Justice Natalia Kimaro, Justice Bernard Luanda and Justice Catherine Uriyo.
In the appeal, TANESCO protests a decision earlier reached by the High Court in Dar es Salaam zone which upheld a ruling by the International Commercial Court in the breach of contract case opened by Dowans Inc. against TANESCO.
TANESCO said in its appeal that amounts ordered as payments to Dowans Inc. was so huge and that if TANESCO tries to settle that debt obligation it would be ruined and throw the country’s power sector into chaos.
SOURCE: GUARDIAN ON SUNDAY
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