A report for the government of Tanzania on a major coal and iron ore project at Mchuchuma in the south of the country claims the country is being denied access to a vast source of energy and mineral deposits with the potential to give the national economy a much-needed boost.
The project has stalled for several years now as allegations of "dubious dealings" by a local investor company and high-level corruption continue to linger.
The Mchuchuma coal fields hold in excess of 535 million tonnes of coal suitable for steel manufacturing and power generation purposes, of which at least 159 million tonnes are a proven resource considered commercially-viable for extraction.
Tanzania has been plagued by reduced production at its major hydro-electricity utilities and sources close to the project suggest that Mchuchuma could have solved thatproblem and even created a surplus of electricity for export
A planned coal-to-electricity project at Mchuchuma is geared to initially generate up to 400 megawatts of electricity while the nearby Liganga iron ore range is believed to hold deposits of at least 30 million tonnes of ore body, in an inferred resource of almost 1,200 million tonnes.
Sources say the government is now keen to ensure it picks a credible strategic investor to develop the vast iron ore deposits at Liganga, and in so doing avoid a repeat of past experiences of controversy linked to the project.
However, long-standing allegations of corruption in relation to both aspects of the project have still to be dealt. The matter is understood to have been referred to the Prevention and Combating of Corruption Bureau (PCCB).
Opposition legislator Mohamed Mnyaa (Mkanyageni-CUF), shadow minister for industry and trade in Parliament, is one of those who have brought the subject up in Tanzania's National Assembly, seeking explanations from the government over the seemingly endless controversy surrounding the Mchuchuma/Liganga project.
Among Mnyaa’s assertions in Parliament is that the PCCB ought to launch a formal investigation into one particular local company, MM Steel Industries, which has reportedly been keen to take over the project. The Dar es Salaam-based company is owned by local businessman Subash Patel.
Kigoma North MP Zitto Kabwe (CHADEMA) has also enquired within the House about the controversies surrounding the project.
A number of legislators have accused government officials of showing open favouritism for MM Steel Industries to be awarded the mammoth project, which was hatched and nurtured under the watch of at least two former holders of the industries and trade ministerial portfolio, Nazir Karamagi and Basil Mramba.
According to government officials, the search for a strategic investor to take over the project is still on, and the state-run National Development Corporation (NDC) has the mandate to oversee this process on behalf of the government.
This is despite the fact that in 2001, an agreement of intent was signed between the government and a consortium of companies called the ’Project Sponsors’ - consisting of NDC, Siemens (SA), Grinaker-LTA, and Cinergy Global Power - to expedite the project.
Sources describe the reasons for the continued delay of the project take-off as being mainly ’’undue political influence’’ and ’’elements of corruption.’’
Source: This Day, Dar Es Salaam
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