I LOVE anything to do with money, for example how to earn and where to spend it. The way people have been earning money in this land of Serengeti National Park and Zanzibar isles has become a hot button issue.
Since president JPM took office, people in position to decide how public money is spent are no longer at ease. Contrary to popular belief in some anti-government circles, the anti-graft fight is no longer a one-man show.
Many national and provincial leaders have been taking action to expose thieves and those who have caused losses or misuse of public monies. Take the case of the pension fund company that prides itself on good performance in real estate investments.
In the last national audit, the comptroller and auditor general discovered some anomalies in some of the pension fund’s transactions. His report for the SSF was not very flattering. This time the public accounts committee of the national parliament got into the act.
They grilled top bosses of the public company. Why? It seems the corporation had entered into an agreement under questionable terms. Just consider the following. The proposal involved the development of 20,000 plots somewhere in Kigamboni, Dar es Salaam, a project worth some 1.4 trillion shillings.
The fund would be a minority shareholder with 45% share while its business partner would hold 55%.The partner would cough up 35% of the value in cash and the 20% would come from the land value. Now it gets interesting.
The land was valued at 800 million shillings an acre. Who did the valuation is not clear. For that kind of money in Tanzania, you can buy a 7,000 square metre plot and build a palatial mansion on it. It gets even more interesting. The two partners decided to begin the project by developing 350 plots (1.7% of the total number).
Well, as you know, a journey of 1,000 miles begins with the first step. Then came the clincher. In this first phase, the minor partner paid up 129 bn/- (79%) while the majority shareholder could only manage 11bn/- or 21%.
Where did the 45 and 35 percent cash sharing go? Question is, with such an interesting twist of affairs, how will the two partners make the project succeed when 98% of the 20,000 were plots yet to be funded, never mind developed? Was this project heading anywhere?
Anyway, president JPM’s government already took action by sacking/suspending directors and associates. Problem is, while the new management was not involved in the questionable deal, they are in the hot seat. The buck stops with them.
The new directors worked out that the plots were grossly overvalued and are only worth 25mln/- each. Phew. I know my arithmetic. Talk about overinflation.
From 800 million a pop to 25 million is a long way down in value. That is mind boggling. Do the math, 800 minus 25 times 20,000-350 (800-25 × 20,000-350) is the ghost value of the plots.
After all the sniffing and digging by PAC, the revenue authority and the anti-corruption chaps, it emerged that there was not enough land owned by the project to make all those twenty thousands of plots.
In Tanzania we are used to ghosts. Ghost workers who get regular salaries, ghost medical supplies that disappear en-route to hospitals, ghost trips that are paid for but not undertaken and even ghost degrees some people claim to have but never actually studied for.
Who would notice another ghost saga? At the rate we are going we will need to contract ghost busters to deal with the many episodes breaking at dawn and twilight disappearances of manpower, money, materials and means in our national soap opera. Hopefully there will be a hero walking off into the sunset at the end of the series’ last episode. That pension fund is a public company.
Meanwhile a private company is facing some challenges to its operating costs after government honchos apparently reneged on a promise to supply its cement factory with gas for running its turbines and ovens.
Can you imagine there being a shortage of gas in Mtwara? There is gas everywhere but apparently no cheap fuel for the Mtwara cement factory.
Apparently government prevented or banned the factory from importing South Africa coal, even as local coal of indeterminate quality and higher cost was available hundreds of kms away. Without the two cheap energy sources, the company is forced to burn the expensive and more polluting diesel.
I read somewhere that we have 54 trillion cubic gallons of natural gas which belongs not to an investor but to the people of Tanzania? What is the holdup in selling it to Dangote cement? Does the factory need a special permit? I could swear the Dar cement factory is already using Mtwara gas.
And the one company in Mtwara cannot get Mtwara gas? Interesting. The US $500 million cement plant in Mtwara has capacity to produce 3,000 tonnes of cement per day and has been operating at full throttle, producing 2,880 TPD.
The best the energy authorities can do is to give the management of Dangote cement full support and cooperation. The factory is already contributing to President Magufuli’s vision of industrialising Tanzania. We need plenty of cement for the reconstruction of infrastructure damaged by the earthquake in Kagera.
Speaking of Kagera, it seems a substantial part of monies contributed have not been spent. Maybe it is time to start giving each family xx number of cement bags and roofing sheets and let families to figure out how to manage the rest.
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