PRESS RELEASE: Contracts review is a publicity stunt and creation of unnecessary uncertainty in the sector
Subject: Contracts review is a publicity stunt and creation of unnecessary uncertainty in the sector
Irresponsible statements by the Minister of Energy and Minerals will cost our country dearly not only in developing the crucial Oil and Gas but also in attracting foreign direct investment. What is needed in Tanzania is transparency of contracts, sanctity of contracts and building the crucial capacity of TPDC and not mere words from the Minister who actually signs the contracts.
Announcing review of all production sharing agreements (PSA) to be done by the new board of TPDC is simply a publicity stunt by the Minister. What the Minister is unaware of and totally ignorant of is the fact that many reviews have been done and nothing has been done about it. The Parliamentary committee on Public organisations (POAC) had asked TPDC through the office of the CAG to audit all the contracts. Out of 26 contracts, only 4 were audited and one (PanAfrica Energy) was found to have inflated their costs to the tune of USD 26 Million. So review will add nothing except earn short lived publicity for the Minister for his cow boy approach while throwing the sector in huge UNCERTAINTY and slowing down momentum.
Borrowing the words of the US President Barack Obama…..The Minister is shooting first and aiming later portraying a confrontation approach that is ill-advised. His approach on how he is handling this sector will cost our country dearly. The oil and gas companies are very cautious and one thing is certain : they don’t work in uncertain environments where contracts are under threat of being revoked.
What is needed in Tanzania is TRANSPARENCY. The contracts must be made public and the new law must give powers to Parliament to approve the contracts. That is the transformation we need to ensure that our country benefits from it’s resources. If the Minister is serious about walking the talk he must bring these amendments to Parliament instead of uttering irresponsible statements in press conferences.
Another sensible radical transformation needed now is the enactment of the Petroleum Revenue Management act. It doesn’t help just mentioning ‘revenue must not go to treasury’. We must be clear on how we will use this income now to ensure all Tanzanians and their children see the benefits. Establishment of sovereign development fund instead of a sovereign wealth fund shall be a unique departure for Tanzania from the resource curse other African countries are suffering.
We (Tanzania) are competing with Mozambique to build the first LNG plant to supply the Far East Asian markets out of East Africa. While our neighbors are working hard and on time, we do the talking. This must end
Shadow Finance Minister