In one of the list of issues filed on September 30, this year, VIP, the plaintiff, in Civil Case No 229 of 2013 is asking the High Court of Tanzania to determine whether the defendants (Standard Chartered Group, Wartsila and Mechmar) have wrongfully impeded the conversion of the IPTL power plant from fuel oil to gas fuel firing to VIP’s detriment, IPTL and the detriment of the Republic of Tanzania.
This comes in the backdrop of the assertion made by the International Independent Consultant of VIP, Mr James Rugemalira, to the Vice- President , Dr Mohamed Gharib Bilal, recently at a fund raising gala in Dar es Salaam that IPTL has the lowest capacity charges of 1.06 US Cents per kWh but its problem is the high fuel oil energy charges.
Other IPP Electricity providers in Tanzania with their charges in US cents per kWh in brackets are Aggreko (5.77), Symbion (5.65), Symbion natural gas (4.99) and Songas (4.31). Even by using fuel, Oil, which is considered to be the real problem for all IPPS in Tanzania, still IPTL has remained with the lowest energy charges among IPPS.
Mr Rugemalira submitted to the Vice-President with evidence that the real IPTL tariff problem emanates from continued use of heavy fuel oil instead of natural gas since the year 2003 when the Songo Songo Gas pipe line reached the power plant gate at Salasala Tegeta in Dar es Salaam
. This claim is evidenced from the list of issues filed by VIP recently before the High Court, accusing Standard Chartered Bank groups of being responsible for impeding the conversion of the IPTL power plant from fuel oil to gas fuel firing to the detriment of VIP, IPTL and the Republic of Tanzania.
As indicated above, the defendants in the suit are Standard Chartered Bank PLC, Standard Chartered Bank (Hong Kong) Limited, Standard Chartered Bank (Tanzania) Limited, Joint liquidators of Mechmar Corporation (Malaysia) Berhad (Mechmar), Wartsila Nederland BV and Wartsila Tanzania Limited.
In the other issues also filed on 30th September 2015, VIP requested the court to determine whether the defendants wrongfully impeded IPTL’s ability to expand the capacity of the power plant to the detriment of IPTL and the VIP and whether the dependants also misappropriated IPTL funds.
VIP has in addition requested the Court to determine whether by Standard Chartered Bank Representations in the united States District Court for the Southern District of New York the Standard Chartered Group are (a) be stopped from disputing the Tanzania Court jurisdiction and (b) should be enjoined from initiating parallel proceedings in other jurisdictions relating to the same subject matter.
VIP also seeks for determination by the Court whether the defendants conducted IPTL business illegally and wrongfully caused recordings of unauthorised debts, liabilities and costs in the company accounts and wrongfully caused the transfer of its revenues out of control under the disguise of such inflated debts.
Furthermore, VIP requests the court to determine whether if it had not been for the wrongful conduct of the defendants, the original loan under the Facility Agreement would have been fully repaid by 2006.
In the main suit, apart from the monetary compensation, VIP also seeks for a declaration that VIP and IPTL have suffered substantial loss and damages as a result of the defendants’ actions and conduct.
The plaintiff (VIP) is also requesting the court to declare that neither the banks nor their agents have ever legally been creditors of IPTL and the defendants committed fraud, money laundering, corporate waste and oppression, diversion of funds and conversion of IPTL and VIP property, as a result of their conducts.
The VIP move comes as the country’s power sector is undergoing major reforms, which among others see the increased involvement of private sector in power generation. Also part of the reforms is the conversion of existing power plants from using Heavy Fuel Oil (HFO) into natural gas and increasing the use of cleaner renewable energy sources, as well as reducing dependence on hydro power.
Completion of the gas pipeline project from Mtwara to Dar es salaam is especially expected to push the country towards gas reliance for power generation, in the process averting frequent load shedding and power cuts brought about by repeated and prolonged drought that has impacted severely on hydro generation capabilities.
Connection to gas is expected to help the country meet its power needs at cheaper cost. Tanzania’s economy is said to have been losing at least 1 billion US dollars per year for using imported oil to generate power.
/Daily News.
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