By Michel Nkurunziza

An artificial lake could be created in former Gikondo Industrial Zone in Kigali once the relocation of all the factories there to the Special Economic Zone is completed, Rwanda Environment Management Authority (REMA) has said.

Although she could not give more details, Annette Karenzi, the director-general of industry and entrepreneurship at the Ministry of Trade, Industry and EAC Affairs, told The New Times that the first phase of relocating Gikondo industries is complete and that they have lately embarked on the second phase.

The relocation from the decades-old industrial zone became necessary after the area was gazetted by REMA as a wetland, and the first phase involved relocating light industries, while the next phase will see heavy duty plants moved.

Despite the delayed relocation process, REMA has already embarked on a plan to turn the encroached area into other environmental friendly aspects.

Eng. Coletha Ruhamya, the director-general of REMA, told The New Times that by the end of the year, a study would have been completed detailing the viability of turning the Gikondo industrial hub into an artificial lake.

“We want the industries to expeditiously relocate and see how we can create an artificial lake in the area with waste, dirt sieving technology for water flowing into the man-made lake. A study to be conducted will have been completed by the end of this year. Then after we can start mobilising funds for implementation,” she said.

According to Ruhamya, the study will show the lake demarcations and it can be implemented either as a government project or public private partnership because it can be designed as an income generating venture.

“We have already received some requests to exploit the wetland area but requests are of a small area. We have first to clear the entire wetland. Artificial lakes exist in other cities. Once the lake is developed, there should be attractive and environmental friendly commercial activities for leisure so that that people could come for recreation,” she added.

Gikondo Industrial Zone was gazetted a wetland in 2005.

The law that gazetted the area prohibits construction of houses and other infrastructure in wetlands (rivers, lakes, swamps) as they might damage such a place in various ways.

However, the law says that, where necessary, construction of buildings intended for the promotion of tourism may be authorised by the minister in charge of environment.

Ruhamya said an assessment was conducted some time back in ensuring infrastructure are relocated from national wetlands, especially endangered wetlands including Gikondo wetland.

She said the quest to restore endangered wetlands is not limited to Kigali, adding that they are casting the net wider.

“What worries me is the fact that encroachment continues to escalate countrywide and we have to ensure we reclaim them,” Ruhamya said.

According to Ruhamya, proper and sustainable use of wetlands has shown environmental benefits, including disaster risk reduction, since wetlands help purify water and once well conserved, can avert disasters like floods.

According to the National Disaster Risk Atlas, published by the Ministry of Disaster Management and Refugee Affairs (MIDMAR) in 2015, disasters, including those induced by unprotected wetlands could cost Rwanda a massive Rwf100 billion ($132 million), bigger than the budget allocated to the agriculture sector.

Effects of Gikondo wetland degradation on EAC region

The efforts to protect Gikondo wetland is part of Lake Victoria Environment Management Project (LVEMP) project, which operates in five Eastern African countries that share Lake Victoria basin (Burundi, Kenya, Rwanda, Tanzania and Uganda).

The LVEMP project was the first to identify Gikondo wetland as polluted and degraded area.

The East African countries initiated the project to examine the sources of pollution to Lake Victoria and one of the sources was traced to Gikondo wetland through Akagera River.

Studies indicate that industrial waste has polluted the Gikondo wetland, which snakes through the Nyabugogo-Akagera wetland complex, eventually ending up in Lake Victoria.

Environmentalists argue that degradation of Gikondo wetland does not only have impact on Lake Victoria but also on water supply system in Kigali city.

Aware of this, Rwanda Environment Management Authority embarked on saving Gikondo wetland from total degradation.

The low-lying wetland also faced informal settlements with poor sanitation system that also polluted both surface and groundwater.

By Franck Kuwonu

“It is a beautiful day when one returns home after too long of an absence,” King Mohammed VI of Morocco said after the North African country was readmitted to the African Union (AU) at its summit in January.

The decision by AU leaders in Addis-Ababa, Ethiopia, capped a swift and remarkable process since the King informed them at last year’s summit in Kigali, Rwanda of his country’s intention to return to the fold. Thirty-nine of the AU’s 54 countries voted in favour of readmission.

Morocco left the former Organisation of African Unity (AU’s predecessor) in 1984, to protest the seating of the Polisario Front as representatives of the Sahrawi Arab Democratic Republic (SADR), a former Spanish colony west of the Sahara that Morocco considers part of its territory.

SADR disputes Morocco’s position, and 30 years later the dispute remains unresolved. In explaining Morocco’s return to the AU, the king said, “When a body is sick, it is treated more effectively from the inside than from the outside.”

Over the years, the kingdom has expanded its economic ties with many countries on the continent, mainly through trade and investments since it left the AU. Now it appears to have successfully leveraged its economy weight into being reinstated to the AU.

Continental ambition

“We are Arabs, but we are also Berbers and Maghrebi,” Brahim Fassi Fihri, the president and founder of Institut Amadeus, a Morocco-based think tank, told Africa Renewal.

He was referring to the multicultural identity of his country, which is made up of mostly Berber and Maghrebi ethnic groups. He maintains that the decision by Morocco to leave the regional body three decades ago was a “strategic mistake” in the first place. Still, “Africa is our natural home,” he said. “We may have left an organization, but we could never have left the continent.”

As a sign of its political solidarity with Africa, Morocco’s national carrier, Royal Air Maroc, maintained its regular schedule to West Africa at the height of the Ebola epidemic two years ago, when all international air carriers, with the exception of Belgium-based SN Brussels, suspended flights to the affected countries of Guinea, Liberia and Sierra Leone over contagion fears.

The decision was based on humanitarian grounds, not commercial–out of brotherly solidarity “reflecting the kingdom’s constant commitment to Africa,” the airline’s spokesman told Agence France-presse (AFP) at that time. The airline has expanded its network across the continent. Over the past decade, it has increased its flights to African destinations from 14 in 2007 to 32 in 2016.

To some extent the story of the national carrier is a telling testament to its expansive economic ambition on the continent.

Over the 10-year period starting in 2004, Morocco’s trade with the rest of the continent grew by an annual average of 13% ($3.7 billion) in 2014, 42% of which was with sub-Saharan Africa. This represented just 6.4% of the kingdom’s overall trade globally during the same period, according to a government report titled Morocco-Africa Relationship: Ambition for a New Frontier.

First investor in West Africa

Yet the most remarkable change was Morocco’s direct investments in the continent. In 2015 it invested $600 million, with neighbouring Mali getting the lion’s share, followed by Côte d’Ivoire, Burkina Faso, Senegal and Gabon, according to the World Investment Report 2016, a publication of the United Nations Conference on Trade and Development (UNCTAD).

Over the decade ending in 2016, Morocco’s investment in sub-Saharan Africa represented 85% of its overall foreign direct investment (FDI) stocks, according to data from the country’s finance ministry and the African Development Bank.

“Moroccans became a more prominent investor on the continent, initiating 13 intra-African investments–its highest in over a decade,” reckoned a 2015 survey report by Ernst & Young, a global financial consultancy firm. The reason behind the growing interest in sub-Saharan Africa, says Ernst & Young, was that “Moroccan companies are looking towards sub-Saharan Africa as their country becomes a platform for exporting to other African countries.”

Morocco’s investments are mostly concentrated in banking and telecommunications sectors, which in 2013 accounted for 88% of its FDI stocks in sub-Saharan Africa.

The country’s leading bank, the Attijariwafa Bank Group, and part of the kingdom’s holding company Société nationale d’investissement (SNI), with 7.4 million customers and more than 16,000 employees, operates in 10 sub-Saharan African countries: Cameroon, Republic of Congo, Côte d’Ivoire, Gabon, Guinea-Bissau, Mali, Mauritania, Niger, Senegal, and Togo.

The Banque Marocaine du Commerce Extérieur (BMCE) group has a network of 18 country operations, mostly in West, Central and East Africa through Bank of Africa, its subsidiary. Maroc Telecom, the leading national telephone company, operates in 11 African countries, such as Burkina Faso and Mali, under different names, including Moov in francophone West Africa.

Preferred destination

Beyond these traditional sectors, Moroccan companies have also ventured into insurance. The Saham Insurance Group, for one, began operations in 10 African countries in 2010, and continues to expand across the continent, most recently with the acquisition in 2015 of Continental Reinsurance Plc of Nigeria.

For many years West African countries and to some extent Central African countries were the preferred destinations of Morocco’s investment in sub-Saharan Africa. In a letter to the AU, the king explained that “the important involvement of Moroccan operators and their strong engagement in the areas of banking, insurance, air transport, telecommunications and housing are such that the kingdom is now the number one investor in West Africa.” He added, “My country is already the second largest investor on the continent and our ambition is to be ranked first.”

Last October the king travelled to East Africa and Ethiopia, as Rwanda and Tanzania prepared to sign business deals. “The Moroccans’ current visit to East Africa marks a serious intent to enter the region and widen their interests in Africa,” The New Times in Rwanda reckoned.

To some observers the reasons behind Morocco’s foray into the continent are purely economic. “Several Moroccan companies are betting their growth on sub-Saharan Africa,” says Mr. Fihri. He toldAfrica Renewal that Moroccans, just like Americans, Europeans and Asians, are interested in Africa because it is “a continent with huge growth potential.”

In September 2015, Abdelmalek Alaoui, a Moroccan editorialist and political analyst, wrote in La Tribune, a French weekly financial newspaper, “Well ahead of other investors [before the latest rush on the continent], Morocco was able to see potential where others could only think of risks.”

Political leverage

However, other analysts like Amine Dafir argue that Morocco’s growing economic interest on the continent was designed to shore up influence it may have lost by withdrawing from the AU.

Strongly supporting Morocco in its formal application to rejoin the AU was a group of 28 African countries, representing more than the half of the votes (27) required for admission.

The pro-admission countries penned a letter to the AU requesting the suspension of SADR’s membership until issues surrounding the legality of its existence are resolved by the United Nations Security Council. “Our demand is grounded in international laws,” said Macky Sall, the Senegalese president, whose country was one of the signatories.

Over the last three years, the king of Morocco, often travelling with a large entourage of businessmen, has visited several African countries, including Côte d’Ivoire, Gabon, Guinea-Bissau, Mali and Senegal. Besides having been the most vocal supporters of the kingdom, these countries were also the top five destinations of Morocco’s FDI in sub-Saharan Africa.

In Addis Ababa, last month, 39 member states out of 54 voted for Morocco readmission; an outcome that Jawad Kerdoudi, the head of the Moroccan Institute of International Relations, had predicted as a “diplomatic victory born out of a deliberate and actions-driven strategy”.

ANALYSISBy Isaac Khisa

Dfcu’s new take-over will help expand its footprint countrywide

When Bank of Uganda Governor Emmanuel Tumusiime-Mutebile announced that they were transferring liabilities and assets of Crane Bank to the Development Finance Company of Uganda (Dfcu), many wondered how that was possible.

Crane Bank, set up in 1995, has been the fourth largest commercial bank in Uganda while Dfcu has been the distant sixth, out of the country’s 25 commercial banks. The two lenders, however, had an insignificant variance in market share.

Crane Bank controlled 8% market share offering corporate and retail services, with a focus on micro, small and medium-sized businesses while Dfcu had 7.5% market share and focusing on consumer banking, development and institutional financing, and treasury.

But Crane Bank’s trouble started last year when it registered Shs3billion loss in 2015, down from a Shs 50 billion profit in previous year due to high level of Non-Performing Loans and subsequent decline in its core capital to below 50% per legal requirement under the law.

This prompted BoU to take over its management on October 20, 2016 to avoid what it termed as ‘systemic risk to the financial system and allow the lead investor Sudhir Ruparelia, who had 48.67 % shares to either inject in more capital in the financial institution within six months or the regulator looks for a new investor.

And as it became clear that Sudhir, one of the Forbes listed 50 richest men in Africa, could not find a new investor to inject capital into the bank, BoU moved to welcome bidders for the Crane Bank takeover.

The bidding, according to BoU attracted 13 investors including Dfcu, Barclays Africa, First National Bank of South Africa, Aethel Partners, and General Equity, a New Zealand-based fund.

Justine Bagyenda, the executive director supervision at BoU told The Independent in an interview that during the analysis of the bidders, Dfcu emerged as the winner, with the best proposals on how it will contribute towards the banking sector.

“In the process of selecting the acquirer, we looked at the financial status of the prospective acquirer, who is behind this acquirer, is the new acquirer going to put in more capital because Crane Bank was significantly under-capitalized, and whether it had a strong shareholding,” she said.

“Some of the investors informed us that they were not interested in taking over the Crane Bank. They only wanted to take-over management and offer consultant services.”

For that, Bagyenda says only Dfcu met the set criterion for taking over Crane Bank because it had a strong shareholding including Netherland’s Rabobank and Norway’s Norfund, which owns 27.5% each of the lender, UK’s Commonwealth Development Corporation (15%) , and the Uganda’s National Social Security Fund.

“This means that Dfcu is able to rise more capital both locally through the stock exchange and also through its international partners for efficient operation of the bank,” Bagyenda added.

Dfcu management said in a statement that they have begun integrating the assets and liabilities of Crane Bank Limited into its business.

“Further supplemental actions required to give effect to this integration will continue to be implemented by both the Bank and the company including additional equity injection by the company into the bank,” said Dfcu in a statement on Jan. 27.

Dfcu gets boost with Crane bank take-over

Dfcu’s Crane Bank take-over makes it become the second largest commercial bank in the country, with an asset base of Shs3.37trillion, just behind the market leader Stanbic Bank that boasts of Shs3.73trillion. It also boasts on the increase in the branch network from 45 to 66 branches countrywide.

Mutebile said the Crane Bank was transferred to Dfcu following a confirmation from an external auditor that the bank’s liabilities as at October 20, 2016 grossly exceeded its assets and that it was insolvent, which insolvency continued to date.

“BoU on Jan 24, progressed Crane Bank from statutory management to receivership, with BoU as the receiver,” Mutebile said.

“In exercise of its powers as a receiver, under Section 95(1) (b) of the Financial Institutions Act, BoU has now transferred the liabilities (including deposits) of Crane Bank to Dfcu Bank Ltd and in consideration of that transfer of liabilities has conveyed Dfcu, Crane Bank assets.”

This implies that over 500,000 Crane Bank customers and depositors shall now have their accounts operated by Dfcu through its wide branch network, some of which were formally Crane Bank branches.

In addition, Sudhir and his partners in the bank will become a shareholder in Dfcu

Crane Bank take-over becomes the third commercial bank in five years to be taken over by BoU and later sold to new investors for failure to meet the minimum capital requirement that now stands at Shs 25billion. In 2014, BOU revoked the licence of Global Trust Bank Uganda after it failed to become commercially viable, accumulating losses up to Shs 60bn and its assets and liabilities handed to Dfcu Bank.

In 2012, BOU took over the management of the National Bank of Commerce (NBC) and immediately handed it over to Crane Bank citing dire financial constraints.

Crane Bank’s take-over, which also has a branch in Rwanda, comes at the time commercial banks are optimistic that the banking sector will register a surge in profitability on the back of improving economy and a reduction in Non-Performing Loans this year compared with last year. As at the end of 2016, Uganda had 25 commercial banks.

Dfcu listed on the USE on October 14, 2004, registered a 16% drop in profit after tax to Shs35.3 billion in 2015 citing increase in NPL’s compared with the previous year.

By Stanley Akpunonu

In a renewed effort to stem the tide of illegal operations, prevent the sale of unwholesome meat and improve hygiene conditions in abattoirs in Lagos State, no fewer than 24 butchers and cattle marketers have been arrested for offences bordering on illegal operations in a weekend clampdown carried out against illegal abattoirs, slaughter slabs and cattle markets by the state government.

The Commissioner for Agriculture, Mr. Oluwatoyin Suarau, told journalists that the exercise was carried out in Ikorodu and Badagry by the State Monitoring, Enforcement and Compliance Unit on Abattoirs and Slaughter Slabs, Stray Animals, Meat and Live Cattle Transportation and Regulation of Veterinary Premises.

He added that beside the 24 butchers and cattle marketers who were arrested for illegal operations, large chunk of unwholesome meat being processed with dirty stagnant water alongside live cattle were impounded during the raid.

According to a statement by the Assistant Director, Public Affairs, Ministry of Agriculture, Tunbosun Ogunbanwo, 10 butchers were arrested from illegal abattoirs by the enforcement team in Owutu Ikorodu while 14 butchers and marketers were arrested in the Badagry axis.

He said: “The operation in the Badagry axis affected illegal slaughter slabs at Seme J5 Zongo, Iya Afin and Ajara; and illegal animal markets at Iberekodo, Limka and Toll Gate.”

The Commissioner, while stressing the need for monitoring, enforcement and compliance in the red meat value chain business, added that the effort will help prevent spread of diseases, promote data collection for planning, promote good animal welfare and make Lagos a safe place for all inhabitants by discouraging environmental pollution and health hazards.

By Eunice Kilonzo

Doctors are now training their guns on Health cabinet and principal secretaries, demanding their immediate resignation or sacking.

The doctors Monday said their strike had dragged on because Cabinet Secretary Cleopa Mailu and Principal Secretary Nicholas Muraguri did not have the interest of poor Kenyans at heart.

Prof Omondi Oyoo, a rheumatologist and member of the Kenya Medical Practitioners, Pharmacists and Dentists’ Union demanded the two officials’ replacement “with people who can negotiate with us so that the strike comes to an end”.

He insisted that Dr Mailu and Dr Muraguri were not ready for negotiations.

“Those with the interest of this country at heart should demand for the immediate removal from office of Doctors Mailu and Muraguri,” he said.

“They play games with us then issue offensive press statements.”

The associate professor at the University of Nairobi’s School of Medicine said his peers acknowledged that the government was committed to ending the strike — as President Uhuru Kenyatta met with the union officials in Mombasa early this month — but the two men at the helm of the ministry are out to reverse the efforts.

“But the issue is with the government agents who have been tasked with negotiating with us to end the strike. They are colleagues but have forgotten our plight and look at doctors with contempt,” Prof Oyoo said at Kenyatta National Hospital where doctors convened to address journalists.

The doctors maintained — as they have since the strike began on December 5 — that they would only discuss issues related to the 2013 collective bargaining agreement they negotiated and signed with the government “which is legally binding”.

During an interview on Sunday evening, the cabinet secretary said he would continue talking to doctors’s representatives with the hope of ending the long strike by Thursday.

At the same time, KMPDU Nairobi branch Secretary-General Thuranira Kaugiria said seven of the union members, who are part of the negotiating team with the health ministry, were ready to go to jail for a month for defying a directive to end the strike.

On January 12, the Industrial Court gave the union 14 days to call off the strike. The deadline is January 26, just two days away.

“We are ready to go to prison. We shall escort them to the courts for the ruling and to jail,” Dr Kaugiria said Monday.

“We shall conduct night vigils in the jails for the 30 days they will be held,” he said.

Dr Kaugiria added that KMPDU members would congregate in Nairobi today “ahead of the imprisonment of our leaders”.

By Deogratius Kamagi

Dar es Salaam — President John Magufuli yesterday confirmed that Turkey will be participating in the construction of the central railway project, living open China’s role in the huge infrastructure projeEct.

The President who hosted his Turkish counterpart Mr Recep Erdogan at bilateral talks at State House in Dar es Salaam revealed Turkey had been invited to construct 400 kilometres of the facility.

Magufuli said he had asked President Erdogan for a loan to help build the railway to link Dar es Salaam with neighbouring countries including Rwanda, Uganda and Burundi.

“President Erdogan has accepted my request, saying it’s a small issue to him… however, we have also received a bid from a Turkish company that is keen on executing the project,” President Magufuli revealed, in his first public remarks on the alleged behind the scene lobbying between Turkey and China to lead in the investment.

The Tanzanian leader said they were sourcing for the funds from the Turkish Exim Bank. He however did not say how much money the deal would cost. The government plans to overhaul the nearly 1300 kilometres railway into a modern standard gauge railway as part of the industrialisation stratergy.

Initially, China appeared to have won the deal to assume construction through a consortium of its companies and pledged $7.6 billion for the entire project. A signed deal with Beijing however was thrown into doubt after the new governemnt overturned it following corruption concerns. A number of government officers are facing abuse of office charges over the claims.

President Magufuli and President Erdogan did not allude to the Chinese role but the public acknowledgement means Turkey is almost assured of its participation. All may not be lost for China, however, as nearly 900 kilometres of the railway will be up for grabs, if the specific reference of the 400kms by Dr Magufuli is anything to go by.

Efforts since last week to obtain comment from the Chinese embassy in Dar es Salaam have been futile. A source at the embassy told The Citizen that the embassy would not be immediately issuing statement on its involvement in the project. Tanzania’s turning to Turkey for participation would appear to confirm Dar policy change to seek for concessional loans from China, South Korea, India and Turkey after failing to get funding from the traditional western markets over stringet conditions and donor conditionalities.

Opposition leader Zitto Kabwe recently raised concern on what Turkey’s forey would mean for China-Dar bilateral relations but some analysts have dismissed such fears, saying the country was free to extend its tentacles in bilateral relations with more friendly nations.

Yesterday, the two presidents pledged to work together to enhance bilateral relations. President Erdogan also reached out to Tanzania to help him fight what he said was his administration’s enemies with establishments in Tanzania.

Tanzania needs to raise its stake as the balance of business was in favour of Turkey. The business volume between Tanzania and Turkey has increased from $66 million in 2013 to $190 million in last year.

Said Dr Magufuli: “They are also doing very well in the agriculture sector, holding the 7th position worldwide, therefore we have from them the right platform for learning.”

For his part, the Turkish President pledged continued support, saying his country is set to further its investments in Tanzania.

He said his government aims to increase investment volume in Tanzania from $150 million to $500 million.

President Erdogan promised to increase the number of scholarships offered to young Tanzanians to study in Turkey.

“We shall also increase opportunities for training of members of the Tanzania Peoples’ Defence Forces in Turkey,” he said.

He also asked the Tanzania to support his government in the fight against terrorist group, Fetto, led by exiled Turkish preacher Ferthullah Gulen.

“We ask our friends from Tanzania to support us in our the fighting against terrorism in our country… it the same group that staged a coup d’etat against the government on July 15 last year, but the attempt failed after forces loyal to the democratic government defeated them,”

“The group is dangerous and is active in many countries under an umbrella of investing in social services including education and health, we want you to be carefully with them,” he said

Meanwhile, Tanzania and Turkey has inked nine Memorandums of Understanding (MoUs) on different areas of cooperation.

These MoUs cover sectors such as tourism, education, small and medium industries development, aviation, broadcasting, defence, industry, health as well as the cooperation between the Tanzania’s Centre for Diplomacy and the its counterpart in Turkey.

Speaking shortly after the event, the minister of Natural Resources and Tourism, Prof Jumanne Maghembe, said the MoUs will deepen cooperation on the sector by increasing number of tourists to the country from Turkey.

The Minister of Health, Community Development, Gender, Elders and Children Ms Ummy Mwalimu said the agreement will help to upgrade the Integrated Hospital Management Information System (IHMS) in public hospitals.

By Dunstan Mhilu

Dar es Salaam — At least 87 public servants in the President’s Office (Public Service Management and Good Governance) will be moving their offices to Dodoma effective yesterday.

This was revealed by the minister charged with public service management and good governance, Ms Angellah Kairuki, at a news conference in Dar es Salaam yesterday.

“We are moving to Dodoma. From now on our offices will be based in Dodoma. Officially, our offices will be opened on January 30,” Ms Kairuki stated.

According tot he minister, those packing ready for shirting to Dodoma include, herself, the deputy minister, permanent secretary, deputy permanent secretary, directors, their assistants, senior officers and other staff.

However, she said that some ministry employees will remain in Dar es Salaam to deal with administrative issues, including management and finance, until their offices were completed in Dodoma.

She stressed that all serious matters concerning the ministry, including those on policy, would be taken care of in Dodoma.

According to Ms Kairuki, temporary offices of the ministry will be at the University of Dodoma’s College of Humanities and Social Sciences until the construction of ministry building is completed.

The shifting to the designated capital of Ms Kairuki and her ministry’s top brass follows the directive by President John Magufuli who ordered on July 25 last year that all government offices must be moved to Dodoma by end of next month.

The Prime Minister, Mr Kassim Majaliwa, has already implemented the directive and moved to Dodoma in September last year.

Other ministries are expected to shift before the February 28 deadline.

“Eskom, accused of overly cozy ties with the Guptas featured heavily in the report, with 916 mentions. … it’s Eskom’s chief executive, Brian Molefe, who comes out looking the worst. According to cell phone records, Molefe had 58 phone calls with the eldest of the Gupta brothers, Ajay Gupta, between August 2015 and March 2016, just before the Guptas purchased South Africa’s Optimum coal mine for 2.15 billion rand ($160 million). Eskom, which prepaid the Gupta’s Tegeta Exploration and Resources 600 million rand for coal, had been accused of helping to finance the Guptas’ coal mine deal through preferential treatment.” – Quartz Africa

In South Africa, as elsewhere in countries both large and small, the debates about government energy policy are often framed in terms of what is best for the “national interest.” But few doubt that behind these choices between renewable energy options and others (fossil fuels or nuclear energy), there are also private interests, whose roles in the management of the state are not new but are becoming more and more blatant (see below on links on the common stakes of the incoming Trump administration and Russia’s Putin in promoting fossil-fuel interests).

Concentrating on this aspect of what is termed “state capture” in South Africa, this AfricaFocus Bulletin includes (1) brief excerpts from the 355-page report on “State of Capture” from Public Protector Thuli Madonsela; (2) an article with a summary of the report from Quartz Africa, and (3) an article from The Conversation on the state capture issue and its effects on plans for nuclear energy.

Two recent articles with background on the energy debate include:

le Cordeur, Matthew, “5 reasons why Eskom is wrong about renewables costs – CSIR,” Jan 12, 2017 http://www.fin24.com – direct URL: http://tinyurl.com/jmpts84

“Eskom delaying R50 billion renewable energy plan to push nuclear goals,” Jan 10, 2017, http://businesstech.co.za – direct URL:http://tinyurl.com/zcqku94 – Editor’s Note

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Just Announced re State Capture in Mozambique

Watch live on youtube January 25 Zitamar News and Africa Research Institute present: A Webinar on Mozambique’s Debt Crisis Wednesday 25 January – 15:00 Maputo / 13:00 London / 08:00 New York https://www.youtube.com/watch?v=h62LLithnV4

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The Trump Election: Intersecting Explanations http://www.noeasyvictories.org/usa/trump-win-reasons.php

Observations (second installment), Jan 23, 2017

In the period between the election and the inauguration, the highest profile debate about reasons for the Trump electoral win was about Putin’s intervention. But that debate produced more heat than light, while key issues such as the common interests of Putin and the Trump administration in promoting the fossil-fuel industry received only marginal attention.

See http://noeasyvictories.org/usa/putin-intervention.php for short observations and database entries for 31 sources to date.

Articles on the fossil-fuel connection in particular include:

Joe Romm, “Did Putin help elect Trump to restore $500 billion Exxon oil deal killed by sanctions?,” ThinkProgress, Jan 8, 2017 http://tinyurl.com/z6d45ub

Rachel Maddow, 5-minute video on ExxonMobil & Russia deal, Dec. 20, 2016 at https://www.youtube.com/watch?v=n60SzMzjXog

Alex Steffen, “Trump, Putin and the Pipelines to Nowhere You can’t understand what Trump’s doing to America without understanding the ‘Carbon Bubble’,” Dec 15, 2016, http://medium.com – Direct URL: http://tinyurl.com/hb2xnc6

“State of Capture”: A Report of the Public Protector

14 October 2016

Full 355-page report in pdf available at http://tinyurl.com/jffpskt

5. Evidence and Information Obtained

Introduction

5.1. The Gupta family, originating from India, arrived in South Africa in 1993. They established businesses in South Africa with their notable business being a computer assembly and distribution company called Sahara Computers. The family is led by three brothers Ajay Gupta who is the eldest, Atul Gupta and Rajesh Gupta who is the youngest. Rajesh is commonly known as “Tony”. According to a letter submitted to my office, total revenues from their business activities for the 2016 financial year amounted to R2,6 billion, with government contracts contributing a total of R235 million of the revenues.

5.2. They later diversified their business interests into mining through the acquisition of JIC Mining Services, Shiva Uranium and Tegeta Exploration and Resources, Optimum Coal Mine and Koornfontein Coal Mine. They also started a media company called TNA Media, which publishes a newspaper called The New Age and owns a television channel called ANN7.

5.3. The Gupta family are known friends of the President Zuma. President Zuma has openly acknowledged his friendship with them, most notably during a discussion in the National Assembly on 19 June 2013 where he admitted that members of the Gupta family were his friends. Mr Ajay Gupta (“Mr A. Gupta), also admitted to being friends with President Zuma when I interviewed him on 4 October 2016.

5.4. President Zuma’s son, Mr Duduzane Zuma (“Mr D. Zuma”) is a business partner of the Gupta family through an entity called Mabengela Investments (“Mabengela”). Mabengela has a 28.5% interest in Tegeta Exploration and Resources (“Tegeta”). Mr D. Zuma is a Director of Mabengela.

5.5. Members of the Gupta family and the President Zuma’ son, Mr D. Zuma, have secured major contracts with Eskom, a major State owned company, through Tegeta. Tegeta has secured a 10 year coal supply agreement (“CSA”) with Eskom SOC Limited (“Eskom”) to supply coal to the Majuba Power station. The entity has also secured contracts with Eskom to supply coal to the Hendrina and Arnot power stations.

5.6. Eskom CEO, Mr Brian Molefe (“Mr Molefe”) is friends with members of the Gupta family. Mr A. Gupta admitted during my interview with him on 4 October 2016 that Mr Molefe is his “very good friend” and often visits his home in Saxonwold.

5.7. The New Age newspaper has also secured contracts with some provincial government departments and state owned entities, most notably Eskom and South African Airways (“SAA”).

5.8. The Gupta family recently purchased shares in an entity called VR Laser Services (“VR Laser”). VR Laser has major contracts with Denel SOC Limited (“Denel”), a State owned armaments manufacturing company. VR Laser has also partnered with Denel to apparently seek business opportunities abroad.

5.9. During March this year, Mr Jonas issued a media statement alleging that he was offered the position of Minister of Finance by members of the Gupta family in exchange for executive decisions favourable to the business interests of the Gupta family, an offer which he declined. The Gupta family has denied the allegations made by Mr Jonas.

5.10. At the time Mr Jonas is alleged to have been offered a Cabinet post as Minister of Finance, Mr Nene was occupying the post. Mr Nene was removed from his post on 9 December 2015 by President Zuma and replaced with Minister Van Rooyen. Minister Van Rooyen was replaced by Minister Gordhan on 14 December 2015 as Minister of Finance, 4 days after his appointment.

5.11. Following Mr Jonas’ statement, Ms Mentor also issued a statement to the press alleging that she was also offered a Cabinet post by members of the Gupta family in exchange for executive decisions favourable to their business interests, an allegation denied by the Gupta family.

5.12. The former CEO of Government Communication and Information System (“GCIS”), Mr Themba Maseko also issued a statement alleging that members of the Gupta family pressured him into placing government advertisements in the New Age newspaper. Mr Maseko further alleged that President Zuma asked him to “help” the Gupta family.

What the “State Capture” report tells us about Zuma, the Guptas, and corruption in South Africa

Lynsey Chutel and Lily Kuo

Quartz Africa, November 2, 2016

https://qz.com/825789

It’s the report that confirms South Africa’s worst fears about corruption: that the state has been captured. In 355 pages, former public protector Thuli Madonsela and her team of investigators outline in detail just how much control the Gupta family, a wealthy Indian immigrant family, has over South Africa’s resources. The Guptas’ close friend, president Jacob Zuma, as well as two ministers implicated in the report, went to court to stop its release. But it was finally released on Nov. 2, after protests and a court battle.

The report is potentially damning for Zuma, offering proof that he sanctioned the use of state companies for personal enrichment. But now the real reckoning begins, as a web of corruption around Zuma, the Guptas, and at least three ministers begins to unravel.

Hiring and firing ministers in the Guptas’ house

The report contains a detailed interview with deputy finance minister Mcebisi Jonas, who alleges that the Guptas offered him the finance minister’s post weeks before Zuma was to shuffle three finance ministers in one week. Jonas was driven to the Guptas’ home by the president’s son Duduzane Zuma, where he was met by Ajay Gupta.

Ajay Gupta allegedly told Jonas they’d been keeping tabs on him and wanted him to be their man in the treasury. Ajay Gupta revealed that they’d already made 6 billion rand ($443 million) from dealings with the government, and wanted to make at least 2 billion rand more (about $147 million). When Jonas refused, they tried to sweeten the deal with 600 million rand (about $44 million) and an extra 600,000 rand ($44,318) in cash, right there. Jonas declined the money, and months later became the whistle-blower that launched this investigation when he revealed his story in March.

Vytjie Mentor, who came out after Jonas with an account of how the Guptas tried to offer her the job of minister of public enterprises, in charge of state-owned companies, also details her exchange with the family. According to the report (p.89), Mentor was told during a meeting in October last year at the Guptas’ home that she would go from an ordinary parliamentarian to cabinet minister in a week. All she had to do was make sure South African Airways dropped their route between Johannesburg and Mumbai, making way for the Guptalinked carrier Jet Airways. Mentor declined. She was surprised to see the president himself emerge from an adjacent room, who said “it’s okay girl…take care of yourself,” as he personally escorted her out.

According to the report, the Guptas also have the power to fire ministers seen as stumbling blocks to their plans. Former finance minister Nhlanhla Nene’s insistence on sticking to the rules cost him his job. As did Barbara Hogan, former minister of public enterprises, who refused to allow outside influence in appointments of board members of state-owned South African Airways, Transnet, the national rail, and Eskom, the state power utility (p. 89, 90). On an official visit to India, Hogan said she was shocked to find the Guptas running proceedings. She was relieved of her duties a few months later.

Des van Rooyen, the unknown parliamentarian who became finance minister for a few days after Nene, went to court in a bid to delay the report, fearing it would implicate him. And it has. His phone records show that van Rooyen visited the Guptas’ home seven days in a row before he was appointed as finance minister. He was later moved to a less prominent ministry. Van Rooyen has denied any wrongdoing.

Negotiating on behalf of the Guptas

Mining minister Mosebenzi Zwane also tried to have the report delayed, saying it was hastily prepared and that he had not been given time to respond. According to the report (p. 124, 125), Zwane travelled to Switzerland on behalf of the Guptas to smooth over their acquisition of a troubled coal mine from multinational commodity trader Glencore, helping the Guptas become one of the main coal suppliers for state utility Eskom. Zwane allegedly helped facilitate the deal by accompanying delegates from a Gupta resources company, Tegeta, to Zurich, according to a flight itinerary obtained by the public protector. Zwane could not be interviewed in time for the report, but should be allowed to give his version in subsequent investigations, the report says.

Eskom: Keeping the lights on for the Guptas

Eskom, accused of overly cozy ties with the Guptas featured heavily in the report, with 916 mentions. Lynn Brown, who became the minister in charge of South Africa’s state owned enterprises, is implicated in the report for allowing the appointment of a lame-duck board that turned a blind eye to murky deals made at the energy monopoly.

But it’s Eskom’s chief executive, Brian Molefe, who comes out looking the worst. According to cell phone records, Molefe had 58 phone calls with the eldest of the Gupta brothers, Ajay Gupta, between August 2015 and March 2016, just before the Guptas purchased South Africa’s Optimum coal mine for 2.15 billion rand ($160 million). Eskom, which prepaid the Gupta’s Tegeta Exploration and Resources 600 million rand for coal, had been accused of helping to finance the Guptas’ coal mine deal through preferential treatment.

The report concludes (p, 20), “it appears that the sole purpose of awarding contracts to Tegeta to supply Arnot Power Station, was made solely for the purposes of funding Tegeta and enabling Tegeta to purchase all shares in OCH [Optimum Coal Holdings]. The only entity which appears to have benefited from Eskom’s decisions with regards to [the Optimum coal mine deal] was Tegeta.” Cellphone records also put Molefe in the Saxonwold area, where the Guptas live, 19 times between August and November 2015 and phone calls between Molefe and Ronica Ragavan, head of the Gupta’s holding company, Oakbay Investments. Justifying these calls and visits, Ajay Gupta told Madonsela in an interview last month that Molefe is his “very good friend” who often visits the Gupta compound. But Madonsela says these records show “a distinct line of communication between Molefe of Eskom, the Gupta family and directors of their companies… These links cannot be ignored as Mr Molefe did not declare his relationship with the Guptas.” Eskom hasrefuted any allegations of wrongdoing. “We do believe everything that we’ve done so far was above board,” spokesman for the utility, Khulu Phasiwe, told a local radio station.

Advertising with the Guptas

Themba Maseko, former chief executive of government’s communications agency, in charge of a media buying budget of 600 million rand a year, said he was pressured by the Gupta family to place government ads in their newspaper the New Age. Maseko was also one of the whistleblowers who took his story to the media in March.

In an interview with Madonsela in August, Maseko said he was on his way to a meeting with the Guptas in late 2010 when the president called him on the phone to say, “The Gupta brothers need your help, please help them.” During the meeting with Ajay Gupta, Gupta told Maseko that he wanted government advertising channeled to his new newspaper, the New Age. According to Maseko’s account, the government official told Gupta that he could not decide where government departments advertise. Gupta responded that this was not a problem. He would instruct the departments to advertise in the newspaper

According to Maseko’s account, Gupta instructed Maseko to tell him “where the funds are and inform the departments to provide the funds to you and if they refuse, we will deal with them. If you have a problem with any department, we will summon ministers here.” Later when Maseko refused to take a meeting with a New Age staff, Gupta told Maseko, “I will talk to your seniors in government and you will be sorted out.” Maseko was fired a few months later.

A bright spot: Integrity in the Treasury

The report shows how the Guptas’ plans were repeatedly thwarted by officials in the treasury (p. 131, 132, and 94). The National Treasury, in charge of approving deals linked to state-owned enterprises, stuck to the rules of procurement and public finance. Treasury officials questioned the Eskom coal deal with Tegeta. Unable to stop the initial deal, they succeeded in blocking an extension of the Tegeta contract. These obstructions appear to have frustrated the Guptas and cost Nene his job. Many speculate that current finance minister Pravin Gordhan’songoing legal battles are related to the treasury’s resistance to the Guptas influence.

What next?

Zuma, the ministers, and the Guptas have yet to respond to the damning allegations in the report. Madonsela has since left office, with state capture report serving as her parting shot in a sevenyear battle against corruption. Still, she’s left instructions on how to use with her findings. Her successor, who has already started, should bring potentially criminal accusations in the report to the National Prosecuting Authority and the police’s Directorate for Priority Crime Investigation, better known as the Hawks.

Madonsela has also recommended that the report be taken further by a commission of inquiry, headed by a judge appointed by the chief justice of South Africa’s constitutional court, Mogoeng Mogoeng. There are concerns that the prosecuting authority and the Hawks have been compromised. (They have spearheaded the fraud case against finance minister Gordhan.) But the public’s hopes lie in the chief justice, who has spoken out harshly against the abuse of power before.

“Public office bearers ignore their constitutional obligations at their peril. This is so because constitutionalism‚ accountability and the rule of law constitute the sharp and mighty sword that stands ready to chop the ugly head of impunity off its stiffened neck,” Mogeng said in March when he ruled against the president over his use public funds used to renovate his personal compound in Nkandla.

How the state capture controversy has influenced South Africa’s nuclear build

Harmut Winkler

The Conversation, May 26, 2016

http://tinyurl.com/jgrjcz8

South Africa is facing a critical decision that could see it investing about R1 trillion – or US$60 billion to $70 billion – in a fleet of new nuclear power stations. Proponents argue that it will greatly increase electrical base-load capacity and generate industrial growth. But opponents believe the high cost would cripple the country economically.

What should be an economic decision has now been clouded by controversy, with political pressure to push through the nuclear build and the increasingly apparent rewards it would bring to politically linked individuals.

The nuclear expansion programme needs to be considered exceptionally carefully given that the required financial commitment is roughly equal to the total South African annual tax revenue. Loan repayments could place a devastating long-term burden on the public and on the economy as a whole.

South Africa’s energy needs

South Africa is in the process of massively expanding and modernising its electricity generation capacity. The governmentdriven Integrated Resource Plan aims to increase total capacity from 42,000MW (peak demand of 39,000MW) to 85,000MW (peak demand of 68,000MW) in 2030. A key component of this plan is the construction of facilities to produce 9,600MW of nuclear power. However, this aspect of the plan has been challenged.

The biggest concern is that nuclear power is too expensive for the country. The debate gained momentum when the 2013 update to the 2010-2030 electricity plan found that electricity demand is growing slower than originally anticipated. Peak demand in 2030 is now expected to range between 52,000 MW and 61,000 MW. There is consequently widespread belief that new nuclear power stations can be delayed considerably.

South Africa’s energy generation options

South Africa has had remarkable success with speedy, cost-effective installation of renewable energy power plants. In addition to this, technologies for harvesting South Africa’s plentiful wind and solar energy resources are rapidly becoming cheaper, raising the question of whether the country should not invest more in these options rather than in going nuclear.

The argument that nuclear energy provides a stable base load, independent of weather conditions, is mitigated by improvements in energy storage technologies. But also by the fact that South Africa, with its large coal power production, has a proportionally higher base load than many highly developed industrialised countries. The pro-nuclear option is therefore not unavoidable, as nuclear proponents suggest, but rather a matter for thorough economic consideration.

Zuma and the Russians

The nuclear debate gained a political dimension when President Jacob Zuma and his Russian counterpart, Vladimir Putin, started to develop an unusually close relationship. It culminated in an announcement that the Russian nuclear developer, Rosatom, had been awarded the potentially highly lucrative contract to build the new reactors. The agreement was later denied.

Rosatom was considered the preferred contender, with other bidders only there to lend the process legitimacy, according to some observers. The lack of transparency surrounding the process, coupled with a history of corruption in South African mega-projects like the arms deal, has made the whole scheme seem suspicious to the broader public.

A thickening plot

A crucial thread in this saga involves the Shiva uranium mine, about 30km north-west of Pretoria, the country’s executive capital. It originally belonged to a company called Uranium One, a subsidiary of Russia’s Rosatom. It was sold in 2010 to Oakbay Resources, a company controlled by members of the politically connected Gupta family and the president’s son, in a deal that greatly surprised economists.

The mine was deemed unprofitable and thus unattractive to other mining companies. But it was still considered worth a whole lot more than the R270 million paid by Oakbay. The mine would, however, become highly profitable if it became the uranium supplier to the new nuclear power stations. Oakbay and its associates therefore have a very strong incentive for this nuclear build to happen.

It is here that the nuclear build drama feeds into the recent major controversy surrounding alleged state capture, meaning a corrupt system where state officials owe their allegiance to politically connected oligarchs rather than the public interest. This was highlighted by the shock dismissal of Finance Minister Nhanhla Nene, a reported nuclear build sceptic, but also by subsequent allegations of ministerial positions being offered to people by members of the Gupta family.

Political, legal and civil opposition

The nuclear build’s association with the Zuma faction in the ruling African National Congress (ANC) will be a political hot potato for decades to come. The whole scandal also offers potential opportunity to opposition parties. With increasing evidence of individuals benefiting, opposition parties have found another spot to exploit, as they did with Nkandla. A post-Zuma government would find it most convenient to simply dissociate itself from the whole scheme.

The South African courts have been used very effectively by pressure groups in the past. Already a number of environmental groups have initiated legal applications, and these might end up being escalated to the Supreme and Constitutional Courts. This will delay any building initiative by years.

The South African experience with the 2010 World Cup has shown that mega-projects can come to fruition when there is broad overall support for the initiative. At the same time, South Africans can be very disruptive and obstructive when this is not the case. For example, the public opposition to e-tolling, an electronic toll collection on certain roads.

The two leading opposition parties, the Democratic Alliance and the Economic Freedom Fighters, have already expressed their strong criticism of the planned nuclear build. Their supporters and civil society in general have demonstrated their capacity for mobilisation around specific issues. So the potential for an anti-nuclear protest movement cannot be discounted.

A negative nuclear outlook

Building these plants is a risky business proposition, especially for Rosatom, which is implicated in the developing scandal. The recent political mood swing against state capture and a likely credit rating downgrade add to the risk.

Rosatom has suggested a nuclear build financing option that effectively amounts to it providing a loan. It is, however, conceivable that a future government may not honour debt repayments if there is a view that the construction deal was secured irregularly.

The narrow public support base and downright hostility in some quarters to a nuclear build has already effectively stalled local nuclear construction plans. The level of controversy, high costs and potential for further disruption mean that the planned implementation could only proceed under severe social strain.

Such a scenario could very well cost the ruling ANC the 2019 national elections. And the party is becoming increasingly aware of this. As such, it is posited that the nuclear build will not happen any time as soon as planned.

Pretoria — Public Enterprises Minister Lynne Brown has expressed support for Eskom’s debt recovery strategy.

Speaking at the utility’s Quarterly System Status media briefing on Tuesday, Minister Brown said Eskom’s strategy has thus far yielded positive results.

“It is critical that Eskom recovers all its revenue to be able to honour obligations to its creditors in order to remain sustainable.

“I am encouraged by the manner in which the Interdepartmental Task Team of the department, Eskom, Cooperative Governance and Traditional Affairs with the support of Minister [Des] Van Rooyen, National Treasury, provinces and the municipalities are engaging to resolve the matter,” said Minister Brown.

Last week Thursday, the Minister instructed Eskom to give municipalities until the end of January to clear their outstanding arrears before switching off the lights.

“I have requested Eskom to delay implementing power interruptions until the end of the month to give municipalities a few more days to make agreed payments and avoid negative impacts on local customers and the economy,” said Minister Brown.

The Minister said the country’s power supply dialogue has shifted from that of load shedding and its impact on the economy, to long-term and sustainable energy solutions.

Load shedding was last implemented 17 months ago, with the power system remaining stable. Plant performance has also improved, while maintenance remains on track.

Through Eskom, South Africa has healthy reserves and adequate generation capacity to meet demand until 2021.

This as Eskom said it has surplus energy, even without the use of its open cycle gas turbines (OCGTs).

Eskom’s turnaround

The Minister noted that the utility has turned the corner considering its past history of capacity shortages, excessive diesel usage and the late delivery of new power stations.

“Since the injection of new leadership, Eskom has been able to put together interventions that have been able to steer the company in the direction where we are.”

The Minister said she is pleased with the turnaround at Eskom in line with its five-year design-to-cost strategy to achieve financial and operational sustainability.

Eskom has focused on reducing its cost base, delivering new plants and increasing its sales through cross-border sales, among others.

“The intention in the short to medium term is to lessen the burden on the South African consumer by achieving a moderate electricity tariff. I am assured that the recovery plan on the build program is running a year ahead of schedule,” said the Minister, noting Eskom’s “healthy” profit of R9.3 billion.

Independent Power Producers

Addressing concerns that Eskom has failed to connect additional Independent Power Producers (IPPs), Minister Brown said demand for electricity has been fairly flat for the last decade.

“… The Integrated Energy Plan (IRP) was based on the economy growing over 5% but in reality, the economy has grown below 2% and consequently there has been no growth in the demand for electricity, which was projected at over 2%.

“When Eskom presented its interim results, [it showed] that overall electricity sales volumes only grew 1.2%. As a result, there has to be clear consideration of the rate at which new capacity is added to the grid, [or] else we risk having excess capacity.

“These are the key assumptions underpinning the current IRP2010, which is the basis of the current choices, including the renewable IPPs.

Minister Brown said when South Africa was experiencing capacity constraints, IPPs played a critical role in the energy mix but that this came at a premium price.

“It was more expensive than coal-fired or nuclear power, but it was a price that the country was willing to pay at the time.”

The Minister called on all to allow government to finalise the Integrated Resources Plan, which will inform South Africa’s energy choices going forward.

Coal contracts

Minister Brown said Eskom will continue to radically but fairly transform coal procurement, as this is a non-negotiable national imperative.

From 2010, during its tariff submissions to the National Energy Regulator of South Africa, Eskom has outlined its concerns relating to the high cost of coal and coal quality from coal suppliers.

“Eskom will continue to source coal, as with renewable energy, at the right quality and the right price.”

By Joseph Mwamunyange

Tanzania plans to construct more compressed natural gas (CNG) stations in Dar es Salaam to provide cheaper, cleaner energy for more of its citizens.

According to the Tanzania Petroleum Development Corporation (TPDC), the project will be executed in three phases and will involve construction of 15 compressed natural gas stations in the country’s commercial capital.

“This project hasn’t taken off because of lack of funding. We have divided it into four main zones to simplify investment. TPDC is confident that the project will take off and more stations will be constructed,” TPDC acting public relations manager Francis Lupokela told The EastAfrican.

TPDC also plans to undertake a feasibility study.

“The first study was done in 2012 and the locations for the stations were identified. However, TPDC faced financing challenges for the project.”

Mr Lupokela added that TPDC had learnt from current projects implemented in Mikocheni, the CNG plant at Ubungo and from vehicles using both natural gas and normal gasoline. “The use of natural gas has decreased air pollution and curbed diseases caused by the use of charcoal,” he said.

Many Tanzanians are heavily dependent on biomass, leading to the deforestation of 100,000 hectares per year, according to available data.

In 2012, The EastAfrican reported that Tanzania, through TPDC, was going to spend about $55.1 billion to connect homes, industries and institutions in Dar es Salaam to a natural gas system.

The plan was to set up three trunk pipelines of 65 kilometres and 15 CNG stations to meet demand.

TPDC constructed a pipeline worth $2.8 million to the Mikocheni Light Industrial Area with take-offs at University of Dar es Salaam and Ardhi University.

This same pipeline now serves the 70 houses that are presently connected to the natural gas network, which TPDC now wants to expand to the rest of Dar es Salaam.

Minister for Energy and Minerals Sospeter Muhongo has been quoted saying the country aims to transform itself into a gas economy.

He said this would involve increasing electricity production from the current 97kWh to 236kWh per capita by using natural gas effectively.