DAR ES SALAAM: THE Independent Power Tanzania Limited (IPTL) has refuted reports claiming that plans were afoot for the company to be paid 1.8tri/- by the government in settlement of commercial dispute.
In its statement issued on Sunday, the IPTL dismissed the reports as misleading and meant to tarnish image of the company and its Executive Chairman, Mr Harbinder Singh Sethi.
According to the statement, the management of IPTL through its lawyer, Mr Leonard Manyama, said that at different times the reports appeared on media to mislead the public against IPTL.
“The reports are full of lies, fabrications and aimed at defaming IPTL, the Pan Africa Power Solutions Company (T) Limited (PAP), which is a shareholder of IPTL, and the Director and Executive Chairman of IPTL Mr Harbinder Singh Sethi,” said part of the statement.
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Giving clarification, the statement said among other things the IPTL was established to generate 100 Megawatts of electricity and sell it to the Tanzania Electric Supply Company (TANESCO).
In order to achieve that goal, the IPTL signed three agreements with TANESCO and the government. The agreements were the Power Purchase Agreement (PPA) of 1995, Implementation Agreement of 1995 and the Government Sovereign Guarantee Agreement also of 1995.
According to the Agreements; TANESCO was required to purchase all the electricity produced by IPTL Plants located in Tegeta, Kinondoni District, Dar es Salaam and pay Capacity Charges and Energy Charges.’ The statement says that from 2002 to 2006 IPTL produced electricity and sold it to TANESCO and TANESCO bought the electricity and paid all payments without any dispute.
When it arrived in 2006, TANESCO started a dispute over the payment of Capacity Charges and so the two parties agreed to open a Special Account (ESCROW) where all the funds for the payment of Capacity Charges were placed there and a Special Agreement was signed where the Account was opened at the Central Bank of Tanzania.
In 2013/14, the money in the Tegeta Escrow Account was paid to IPTL immediately after it was proven that the money belonged to IPTL in accordance with the Power Purchase Agreement (PPA). IPTL continued to generate electricity and sell it to TANESCO until 2018 when the Government refused to renew IPTL’s licence to generate power.
