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BUNGE "RUBBER STAMPED" IPTL PROPOSAL




THE resolution passed by the National Assembly to nationalise the Independent Power Tanzania Limited (IPTL) was a rubber stamp of a proposal earlier given by Standard Chartered Bank (Hong Kong) Limited, it has been learnt.

It had been revealed that Standard Chartered Bank wrote to the then Chief Executive Officer of the Tanzania Electric Supply Company Limited (Tanesco), Dr Idris Rashid, proposing the nationalisation of IPTL so that it could be paid a sum of 112 million US dollars.

The letter, dated September 22, 2009, shows that the bank proposed to Tanesco’s legal advisers that the government of Tanzania immediately considers nationalisation of IPTL and that move would be with the support of the bank and with the express objective of implementing the agreed plan.

“If nationalisation was to be agreed upon and implemented, then the whole process could be conducted through the Tanzanian Parliament.

There would be no need to involve courts,” reads a section of the letter in question. The bank alleged in the letter that it believed it has been treated unfairly and inequitably before Tanzanian courts and therefore, was firmly of the view that any attempt to implement its agreed plan through the office of the provisional liquidator of IPTL at the time, would suffer the same fate.

It wrote further that rather than seeking to resolve its claims through international litigation and in light of the progress made with Tanesco on the agreed plan, the bank was prepared to give an opportunity for an early settlement through a consensual nationalisation.

“Accordingly, the bank and its lawyers would, if asked, work with you (Dr Rashid) and your legal advisers in an effort to secure the approval of the committee to a nationalisation proposal, within the next 14 days,” the letter further explains.

The bank went on to propose that the matter could be passed from there to the Cabinet for it to deliberate and with the approbation of the Cabinet, a bill could be placed before Parliament within a timetable consonant with Tanesco’s desire to dispatch power from the project.

“If Tanesco and government of Tanzania manifest a real desire to see a nationalisation achieved quickly and absent any avoidable delay, it can count on full support of the Bank, which would not in such circumstances, see any need to take matters further in any international forum,” the Bank’s letter says.
On November 29, this year, while deliberating the Escrow Account Saga, the National Assembly passed eight resolutions, including a proposal to the government to nationalise the IPTL power plant so that it becomes state owned company through Tanesco.

Addressing the nation through elders from Dar es Salaam Region, President Jakaya Kikwete ruled out the possibility to nationalise the power plant, saying such attempt would jeopardise the government’s good intention of encouraging foreign investment in the country.

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