Tanesco loses Sh6bn in Selcom row.

Tanzania Electricity Supply Company (TANESCO) has incurred a loss of Sh6bn as of yesterday, four days after terminating a contract with Selcom, a company that provides pre-paid electricity services to consumers on behalf of the nation’s electric power monopolist. 

Tanesco terminated the contract with Selcom on Tuesday, alleging that the later had been evading tax at the expense of Tanesco and has been responsible for frequent breakdowns of the electricity vending network (Luku) under its guardianship. 

But seemingly unaware of the loss, Minister of Energy and Minerals, George Simbachawene hailed the decision by his subordinates, saying it was a step toward saving the company from frequent losses of revenues.  

He assured the public that the ongoing LUKU problems were not the fault of Tanesco’s systems but Selcom’s that had failed to deliver the services.

He said they would also conduct thorough investigations on the reliability of networks on telecommunication companies since there had been complaints about the delivery of services.

“We’ll also deal with mobile network providers who do not perform well work out measures against them,” he said  

“We have stopped providing services to Selcom; the firm is not our customer any more and we are calling all customers to access service from Maxmalipo and other mobile providers,” said Tanesco’s Managing Director Felchesmi Mramba on Tuesday.

But just a  day following Mramba’s call The Guardian’s observations revealed long queues at  LUKU vending stations including Mlimani City, Namanga, Tabata, Magomeni and Mwananyamala of customers who looked discontent over the way how services were provided. 

Amina Hassan at Namanga station said she was standing in queue to purchase electricity for the second hour but was still hope against hope over whether she would make it on time. 

She said efforts to purchase electricity through Tigo Pesa (Tigo service) and M Pesa (Vodacom service) had not yielded any positive results.

At Mlimani city Maxmalipo station the meandering queue stretched to the main gate more than 100 metres from the purchasing point, and the urgent was equally troubled by the unusually big crowd to which he had to attend.  

He looked so confused as he failed to respond to the equally frustrated customers who bombarded him with both complaints and questions that went beyond his jurisdictional powers. 

Caroline Limbe also in the queue said they were told that there had been problems with the network since morning when she started the purchasing  processes, implying the problem had been too chronic to resolve. 

But Selcom Tanzania Marketing Manager Juma Mgori told Guardian reporter yesterday that it was Tanesco who was to blame for breaching the contract terms with his company, accusing the electric suppliers of causing the self-imposed loss of Sh6bn. 

He said they have filed a court case seeking interpretation of the law governing the contract between the two parties.

He also accused Tanesco of causing a loss of 18 per cent equivalent to  Sh1.8bn worth tax revenues from breaching the contract with  his company that had been selling 75 per cent of  Tanesco’s electricity countrywide with the average sales of Sh1.5bn every day. 

He said Selcom runs over 11,000 sales points countrywide that provide a wide range of service including water bills, electricity, airtime and money transfers. 

He refuted Mramba’s claims that failure to access electricity was a result of Selcom incompetence service delivery, dismissing the allegations as groundless since it was Tanesco that was in control of the Electronic Vending Getways (EVG), devices responsible for processing transactions.

He said these devices are designed with low capacity to process only 200 transactions per minutes, causing unnecessary delays and inconveniences to customers.  

Tigo Public Relation Officer John Wanyancha said they have cancelled Luku mobile service pending further notice from the relevant authority. Later in the evening yesterday Tigo Pesa manager Ruan Swanepoel said the services were re-instated following a switch to another network provider of the luku services.

However Tanzania Revenue Authority (TRA) Director of Tax payer service and Education Richard Kayombo declined to comment over whether Selcom has been paying taxes..

But he was unaware of the loss of revenues attributed to the termination saga.