IPTL DEAL [TOTAL NEGLIGENCE!]

By, Brian Cooksey

Conspiracy theorists in Dar es Salaam are convinced that this example of gross mismanagement is not accidental, but orchestrated by IPTL and its local supporters to sell their proposal to the public. Although the project was initially launched as a short-term solution to the 1994 power crisis, IPTL quietly drop this idea and instead negotiate a long-term investment in diesel generators. IPTL and government officials cite the ‘unmet demand' for power and the consequent urgent need to increase generating capacity as reasons for completing IPTL without further delay. The 1997 drought ‘proves' the dangers of relying on hydropower. But the addition of 75 megawatts at Ubungo (October 1995) and a further 180 megawatts from the donor-funded Kihansi hydro scheme that is soon to be commissioned are more than adequate to meet projected demand and avoid another power crisis. By the end of 1997, the hydro catchments are full again. In other words, IPTL amounts to excess capacity using one of the most expensive power generating technologies. But by now, politics is already firmly in control of power policy and the local technocrats and their foreign advisors are ignored.

Kuala Lumpur , 29 May 1997
IPTL is a joint venture between Mechmar Corporation ( Malaysia ) Bhd (70%) and VIPEM (30%). Mechmar's largest shareholder HICOM (20%), is one of Malaysia 's largest industrial conglomerates. Mechmar, which is one of HICOM's five listed associate companies, has a dozen subsidiaries of its own. IPTL becomes the thirteenth. Mechmar is a trading and marketing company. IPTL is its first big power project. Originally specialising in boilers and heaters, Mechmar branches out into men's fashion wear (1990) and property development (1992). The company's executive chairman is Tan Kean Wan. Datuk Baharuden Majid is Mechmar's managing director and Chairman of IPTL.

IPTL's proposed power station is to be financed with a US$105 million ten year loan facility jointly organised by Sime Bank and Bank Bumiputra Malaysia Bhd (BBMB). The ‘lead managers' are Sime International Bank (L) Ltd and BBMB Bhd International Bank (L) Ltd. Sime Bank Bhd of Singapore is the manager of the loan facility. Mechmar also issues RM88 million ($35 million then) worth of new shares to co-finance IPTL.

With a market capitalisation of $120 million, Mechmar records $37 million in engineering sales in 1996. At over $160 million, the Tanzanian investment is worth more than Mechmar itself.

After the loan signing ceremony, Tan tells a press conference that IPTL should turn over up to RM200 million in annual revenue (about US$80 million). The power station is expected to contribute more than 50 per cent of Mechmar's profits from 1999 onwards (New Straits Times, 30 June 1997, p. 25).


IPTL's minority partner is VIPEM Ltd, a Dar es Salaam company founded by the late Bakr Somji, a Muslim of the Ishnasheri (Shia) sect, and now run by his son Riaz. Itinerant businessman Anis Mamdani is said to be the brains behind VIPEM. Ahmed Daya is another director. VIPEM specialises in brokering deals between foreign companies and the Tanzanian government, sometimes financed by foreign aid. The company is heavily involved in the Tanzania Harbours Authority (THA), one of the country's richest and most corrupt public corporations.

IPTL's front man and ‘fixer' is James Rugemalira, a former employee of the Bank of Tanzania (BOT). Rugemalira is a director of both VIPEM and IPTL. He is reportedly also the ‘fixer' for Tritel, a company related to Mechmar and owned by tycoon Tajudin Ramli, a close associate of Daim Zainuddin, that enters the Tanzanian cell-phone market in 1998.

James Burchard Rugemalira is from Kagera in the North West of Tanzania. He obtained his first degree at the University of Dar es Salaam as a mature student. After an undistinguished career at the Bank of Tanzania, Rugemalira takes early retirement and enters the private sector. He is taken on board by VIPEM because of his contacts in BOT and the government. As an up-and-coming indigenous businessman, he is a prominent member of various business associations and official advisory committees, and sometimes travels with presidential delegations as a private sector representative.

Dar es Salaam , 10 October 1997
Jim McCardle is not happy. The World Bank is pressuring the government to sign off on Songas, a Canadian backed joint venture to develop Tanzania 's huge reserves of natural gas, and the government is dragging its feet. The Bank is ready to lend Tanzania $200 million towards Songas' $350 million price tag. Songas, which McCardle manages, was conceived years before IPTL, yet no contract has been signed to date. The contrast with IPTL, which obtained government agreements, tax exemptions and other requirements in record time, is no accident. Without IPTL, Songas could have been up and running in time to help avoid the 1997 power crisis.

Songas plans to build a pipeline to Dar es Salaam to fuel the existing four turbines that are currently running on expensive kerosene. IPTL say they will happily convert to natural gas when it comes on stream, but this is disingenuous on their part. Tanesco has a serious cash flow problem. If both IPTL and Songas are commissioned, Tanesco will be saddled with monthly bills for gas and electricity of $11 million that it could not possibly meet out of income from electricity sales.

McCardle admits that Songas seriously underestimated IPTL. ‘Nolan was a joke. Nobody could take his project seriously. We thought nobody would take IPTL seriously either. We were wrong!'

When the cabinet hesitates to endorse IPTL because of the cost implications for electricity, James Rugemalira accuses the World Bank and Songas of mounting a joint conspiracy against him, with Patrick Rutabanzibwa, Permanent Secretary at the Ministry of Energy and Minerals, as their front man. At one point, he refers to Songas as ‘the stillborn child of the World Bank' (February 1999). In a brilliant tactical move, the government announces final agreements with IPTL and Songas on the same day, as related below.

Dar es Salaam , April 1998
Patrick Rutabanzibwa , briefs President Mkapa on IPTL. Like James Rugemalira, Rutabanzibwa is from Kagera, but there the similarity ends. Rutabanzibwa is from an aristocratic clan and is the son of a former ambassador. He studied in the US and the UK . He is a brilliant technocrat, dedicated to the development of Tanzania .

Rutabanzibwa was Commissioner for Energy when the IPTL project was first launched. He knows there is no need for extra generating capacity and that even if there was, IPTL would be the most expensive, rather than the ‘least cost' provider. But he is surrounded by pro-IPTL lobbyists in Tanesco, his Ministry, and the government, who are constantly trying to undermine him. He knows that when investment projects are taken over by politicians, technocrats like himself are sidelined, and only wheeled out to endorse decisions, however crazy, that have already been made.

Rutabanzibwa tries to convince the President that IPTL ‘is a disaster waiting to happen.' If the cost of IPTL is passed on to the consumer, Mkapa will not make many friends. Business and private consumers will face huge increases in electricity prices. Donors will be incensed. Their dismissive attitude towards IPTL is on record.

On the other hand, many heavyweights in the party and cabinet are in favour of IPTL. They try to convince the President that Rutabanzibwa is in the pay of the Bank and Songas. There will be another power crisis if IPTL is not added to the national grid, they argue. What if the rains fail again? Demand for power is growing fast….

Rutabanzibwa puts his job on the line: ‘I promise you, Mr President, there will be no more power cuts between now and the next elections. If I'm wrong, I will resign.'

Rutabanzibwa has made his calculations. The ‘El Niño' rains have struck East Africa . The dams are full to overflowing. An extra 180 megawatts of donor-financed hydro will come on stream in less than a year. Tanesco's demand projections for electricity are way too high. The big mining companies are signing power supply agreements with Tanesco — and bringing in their own generators to run the mines.

Benjamin William Mkapa does not know what to do. He is caught in a hugely difficult bind. Malaysian Prime Minister Mahathir had buttonholed him at a recent meeting of Commonwealth heads of government in Edinburgh to ask why Mechmar's project was not progressing faster. Rugemalira is publicly challenging the government to put up or shut up, as IPTL's affairs become increasingly convoluted. Cancelling IPTL would look like capitulation to donor pressures, a point hammered home in the press by IPTL.

Events conspire to force Mkapa's hand. In December 1997, we learn that IPTL has ordered medium- — rather than slow-speed — engines. An ‘independent' report commissioned by IPTL claims that Tanesco was consulted and agreed to the switch, a claim hotly denied by Tanesco's Managing Director Baruany Luhanga. IPTL dismiss references to slow-speed engines in the PPA as a ‘typing error'. Moreover, IPTL stick to the original project cost of $163 million, and refuse to provide documentary evidence demonstrating that they exercised due diligence in developing their project . IPTL claim there was an open tender, but that the relevant documents are ‘lost'.

The unauthorised switch from slow- to medium-speed engines , refusal to produce evidence of the actual project costs as a basis for calculating tariffs, and dams full to capacity, lead Rutabanzibwa to urge Mkapa to cancel the deal. Finally, reluctantly, he agrees to challenge the project costings.

When the Government approved the Power Purchase Agreement between IPTL and TANESCO in 1995, it did so based on the express understanding that prior to the commencement of commercial operations …, TANESCO and IPTL would negotiate a final tariff based on (1) actual, reasonable and verifiable capital costs incurred by IPTL …, (2) actual, reasonable and verifiable costs to operate the project, and (3) a fair return to IPTL's investors.
Without informing TANESCO, IPTL unilaterally decided to substitute medium-speed diesel engines for the slow-speed engines stipulated in the PPA. … on April 9, 1998, TANESCO issued a Notice of Default to IPTL…
[In] meetings held on April 14-16, 1998 … IPTL denied that there was a default, … and steadfastly refused to discuss any matters related to the tariff unless and until TANESCO withdrew its Notice of Default.
The Government will not … allow Tanzania 's electricity consumers and the economy to be burdened with extraordinarily high electricity tariffs. … As it now stands under the PPA, electricity tariffs … will need to be increased by nearly 50 percent … by the end of 1998 to enable TANESCO to meet its financial commitments to IPTL. The price of electricity is likely to be even higher in 1999 and the subsequent years. Source: State House, 22 April 1998 (excerpts).

Tanesco's Notice of Default is greeted with a mixture of jubilation and relief in the anti-IPTL camp. The International Monetary Fund's representative in Tanzania , Festus Osunsade, tells Reuters that ‘the government's handling of [the IPTL deal] has been a critical factor in resuming the talks on the Enhanced Structural Adjustment Facility (ESAF). The ESAF review talks were suspended in March after the IMF expressed concern about the power-supply contract.' (Daily Mail, 20 April 1998)

Rugemalira seems to have seriously underestimated the impact IPTL's unilateral switching of engines would have on informed opinion, and his robust refusal to negotiate a reasonable tariff with Tanesco until the Notice of Default is withdrawn further undermines his credibility. His arrogance and apparent disdain for the government — the State House Press release says that ‘IPTL should recognize that the Government represents a sovereign state, free to select internal and external experts, advisers and partners…' — infuriate Mkapa, giving him perhaps the emotional impetus to finally bite the IPTL bullet after months of vacillating. By the time Rugemalira adopts a more conciliatory negotiating strategy, the damage is already done. By 1999, the Ministry of Energy and Minerals is negotiating directly with Mechmar to find possible solutions to the impasse.

Dar es Salaam, 26 November 1998
After months of further wrangling and posturing, Rutabanzibwa persuades President Mkapa to go one step further and to refer the case for arbitration, as provided for in the PPA: ‘The wrangle between Tanesco and IPTL took a new twist yesterday when the Government ordered both sides to take the issue to the International Centre for the Settlement of Investment Disputes for arbitration.'(The African, 27 November 1998)

This is a further blow for IPTL. Such cases may take years to settle. IPTL should have been commissioned in the second half of 1998. In a witness statement dated 8 May 2000, Rugemalira admits that after the 1997 rains, there was no longer any need for IPTL power: ‘The El-Nino rains that followed in December 1997 and changed the deficient hydropower energy supply scenario that had persisted since 1993 should not be allowed to penalize IPTL for relying on previous Government commitments and assurances and proceeding to build the Plant to completion under the PPA….'

In his favour, of course, is the government's agreement to proceed with IPTL. Caveat emptor!

Tendering Without Due Diligence
IPTL's investment consisted of ten state-of-the-art medium speed diesel generators, manufactured in the Netherlands by Wärtsilä, a Finnish company with a global reputation for quality engineering.

There were problems, though. First, the PPA signed in 1995 specified slow-, not medium-speed generators, as explained above. Second, what IPTL claim to have paid for the plant and its installation was arguably anything up to twice its actual cost.

There is nothing wrong with MSD generators, if oil-fuelled generators are the least cost choice. But there was never any attempt to establish which generators were the most appropriate in terms of construction and running costs, efficiency and expected life span.

Typically, medium speed generators are significantly cheaper to build and install than slow speed. On the other hand, they are more costly to maintain and have a shorter working life. Although there are many companies that manufacture both types of generators, IPTL negotiated seriously with only two: Wärtsilä of Finland, who eventually got the contract, and Hyundai from South Korea .

In October 1994, Hyundai had proposed IPTL an Engineering Procurement and Construction (EPC) cost of $99.7 million for five slow speed engines, and $109.3 million including provisional items (a jetty, fuel storage and other items). In November, they also submitted an alternative proposal for eight medium speed engines at a turnkey price of $91 million, excluding provisional items. Estimating provisional items at $12.69 million, in November 1994, IPTL proposed Tanesco a SSD plant for $112.4 million.

On 19 October 1994 , Wärtsilä proposed 11 MSD generators to produce 116 MW for $53 million, including auxiliary equipment. On 15 February 1995 , Wärtsilä submitted an EPC bid for a 10 x 10 MSD plant at a turnkey price of $85.7 million. According to Tanesco's submission to the ICSID (January 2000: 39): ‘Curiously, during the course of the procurement process for the EPC contract under IPTL's stewardship, the project narrowed in scope while the bid prices, particularly that of Wärtsilä, increased.'

Gone from the EPC was a jetty ($5 million), the number of housing units to be built ($7.6 million) was reduced from 37 to 6, with no corresponding adjustment in the EPC price. More important, Wärtsilä's turnkey bid increased by a third, from $85.7 million in February 1995 to $114.2 million in January 1996.

The original housing bid was for 37 units. This was reduced to ten, and the total price increased by over 130%. In fact, only six houses were actually built, prompting Tanesco's lawyers to conclude laconically ‘One does not need to be a Tanzanian real estate appraiser to know that $7,566,000 for six single-storey duplex houses… is beyond exorbitant.' (ICSID 2000: 41).

Wärtsilä's EPC bid for a MSD plant was nearly $1.0 million more than Hyundai's bid for a SSD plant of the same capacity. Instead of proceeding with Hyundai, the only company offering the SSD plant specified in the PPA, IPTL, ‘without consulting Tanesco and in violation of the express requirements of the PPA, unilaterally decided to contract with Wärtsilä for a 10 x 10 MW MSD plant.' (ICSID 2000: 41-2).

Someone who clearly knows what he is talking about wrote to me after reading one of my articles to provide supplementary information. ‘I just want to make you aware that the Wärtsilä company is playing a role in the whole scam that is far from innocent.' For example:

… the EPC cost is extremely inflated. Wärtsilä has given offers for similar plants in other African countries for around USD 60 million. By doubling the price for the plant, Wärtsilä makes it possible for MechMar and itself to get the equity back before the project has hardly started. No risk here! … Wärtsilä was ‘chosen' as EPC contractor not because of a competitive offer, but because they agreed to play along and fraudulently inflate prices. … If Wärtsilä had not agreed to inflate its prices there would have been no way for MechMar to present a project cost as exorbitant as the one that Tanzania now has to live with.

There are a number of unanswered questions concerning the devious process described above. Was it simply Mechmar/IPTL's plan to quietly switch from SSD to MSD in order to benefit from the large price difference between the two plants? Was the overpricing a way of creaming off some of the $105 million bank loan without the knowledge of Sime Bank and Bank Bumiputra? Or was this part of a more sophisticated crony conspiracy with a political dimension? Were Tanesco aware of the switch and just kept quiet about it? How did Wärtsilä come to replace Hyundai in Mechmar's game plan, and how pro-active were Wärtsilä in the whole affair? Did they get a cut in exchange for their complicity?

IPTL: Those In Favour … Those Against
"...Kama huu ndiyo ushirikiano wa nchi za kusini, bora ukoloni urudi.'
(‘If this is ‘South-South co-operation", then colonialism is preferable.')
--Julius K Nyerere commenting on IPTL.

Who supported IPTL, and who didn't? Those actively opposing the project were a small minority. Rutabanzibwa was appointed Permanent Secretary (PS) by President Mkapa precisely because of his integrity and technical competence. On becoming PS, he found systematic corruption in the energy and minerals sector and in his ministry's own finances. Fire fighting on three fronts at once, Rutabanzibwa had his work cut out. Many a lesser person would have succumbed to the temptations of corruption, the dangers of honesty, or to sheer exhaustion. Without Rutabanzibwa, IPTL would have been commissioned in 1998 rather than 2002, and at a tariff even more ruinous for Tanzania 's industrial prospects than that negotiated after the arbitration.

Ruling party CCM Secretary General and Minister for Planning, Horace Kolimba (since deceased) was involved in the original brokering that led to IPTL. In July 1994, Kolimba visited Malaysia and raised the power-rationing problem with the Malaysian government. The latter advised Kolimba that Malaysia had solved similar problems by licensing and promoting independent power producers (IPPs). The Government of Malaysia arranged for Kolimba and his delegation to meet with potential Malaysian investors, who were then invited to visit Tanzania for an assessment of the situation. Datuk Baharuden Majid of Mechmar made his first visit to Tanzania in August 1994. Mechmar had already built a 2.75 megawatt wood-fuel plant for the Commonwealth Development Corporation in Tanzania (1993), and already knew Tanesco well. He held discussions with the Minister for Water, Energy and Minerals Jakaya Kikwete, Simon Mhaville of Tanesco, Esther Masunzu, Assistant Commissioner for Energy, and Juma Ngasongwa, Personal Assistant to President Mwinyi responsible for economic affairs, all of whom confirmed that Tanesco and the government welcomed the IPP solution. A month later, an MOU was signed and IPTL was launched.

Tanesco's Managing Director Simon Mhaville was heavily pro-IPTL, as was his PS at the time, Raphael Mollel. Mollel continued to support IPTL from the Treasury, where he was appointed Deputy PS. A friend of Mhaville told me that Mhaville claims to have been anti-IPTL, and Mollel claims he was ‘only following orders.' Mhaville's successor, Baruany Luhanga has distanced himself from IPTL. Minister of Energy and Minerals, William Shija, was pro. There is widespread agreement that President Mwinyi gave IPTL his tarnished imprimatur. It is precisely the Mwinyi heritage surrounding IPTL that Mkapa has struggled to contain since coming to power in 1995.

A major player throughout was Andrew Chenge, the Attorney General and a personal friend of Mkapa. Chenge's office reviewed the IPTL contract on behalf of the government, and found it acceptable to the letter. At the time, Tanesco advisors -- Acres ( Canada ) and Hunton and Williams (U.K.) -- had written damning reports pointing out that IPTL: (1) was a long term solution to a short-term problem; (2) did not constitute part of a ‘least cost' power policy ; (3) constituted excess capacity ; and that (4) the project was highly overpriced. Both also criticised the proposed IPTL contract, which was generous to the supplier and passed all the risk to the government of Tanzania . IPTL was not time bound, and the final cost to Tanesco would be negotiated after the project was completed!

The PPA was appraised for the government by Mary Ndosi, a State Attorney in Chenge's office. Acknowledging that the Acres and Hunton and Williams comments on IPTL had been reviewed, Ndosi states, with magnificent insouciance: ‘Their advice should be treated as part of our advice on this proposal only to the extent it is not in contradiction to what is contained herein.' There is an affidavit (see below) claiming that Mary Ndosi actively supported IPTL.

Dr Abdallah Kigoda was appointed Minister of Energy and Minerals by President Mkapa in February 1997. Kigoda's rise from a relatively junior post in the Planning Commission to high office was meteoric. On becoming Treasurer to CCM, he joined the inner circle of the ruling party. After one visit to Malaysia , he came home with a large cash contribution to finance an important CCM meeting, though the amount that was eventually used for this purpose is open to dispute. Until events forced him to fall in line behind the Mkapa/ Rutabanzibwa position, Kigoda was a staunch supporter of IPTL. He had stated that there was no contradiction between IPTL and Songas, and that both would be commissioned.

After the 2000 presidential and parliamentary elections, Kigoda was replaced by Edgar Maokola-Majogo, a career politician who had consistently toed the pro-IPTL/anti-Rutabanzibwa line in Cabinet, arguing on at least one occasion for Rutabanzibwa to be sacked.

Mkapa's first Minister of Finance, Daniel Yona, another senior pro-IPTL figure, likewise declared nonchalantly that the government could always foot the bill if Tanesco ran out of cash.

From early on, the Prevention of Corruption Bureau, which reports directly to the President, took a lively interest in IPTL. Edward Hoseah, Director of the Bureau and Co-ordinator of the government's anti-corruption strategy, actively pursued the case, and at one point was ready to arrest Rugemalira on corruption charges. Hoseah was systematically thwarted by the Bureau's Director General, Maj. Gen. A L Kamazima, who along with Chenge, repeatedly told the President that there was no evidence of corruption in IPTL.

I was struck by the fact that there was very little adverse commentary from the business community or from the opposition parties concerning IPTL. Looking for a critical local voice, I approached John Cheyo, an opposition Member of Parliament and Chairman of the Public Accounts Committee (PAC). We met in the lobby of the Dar es Salaam Sheraton. It was not a good choice. As we talked, none other than James Rugemalira came over to greet him in the warmest manner. I hastily turned over my pile of newspaper cuttings so that he could not see what we were talking about. But it was too late. The following day, Cheyo held a press conference in which he sang the praises of private investments in the power industry, telling the government not to meddle with them! I later heard that he was aggressively anti-Rutabanzibwa in meetings of the PAC. On other occasions, Cheyo has been a strong critic of official misuse of public funds.

Much of the anti-IPTL commentary came from the donor community or from foreign journalists. The World Bank's Resident Representative Ron Brigish was more guarded than his predecessor Motoo Konishi, but he did not hide the Bank's concerns with the economic implications of IPTL. Just before becoming Swedish Ambassador to Tanzania , Sten Rylander also went on record criticising IPTL. The Swedish aid agency SIDA, heavily involved in supporting Tanesco over many years, had noted:

Recent events, especially the IPTL affair, (an unsound contract … for capital costs, commercial arrangements, and security package resulting in a cost of procured energy to Tanesco significantly above its own selling price) have shown that in spite of support to least cost discrete infrastructure projects like Kihansi and Kidatu, the total cost structure for power production can be jeopardised by uninformed Government-private sector deals outside the agreed least cost project frame. … The IPTL contract and the energy policy review have highlighted the need for a proper regulatory regime, anchored in legislation, to ensure competition on fair and equitable conditions … to make the market in the energy sector work…' (Swedish International Development Agency, Dar es Salaam, 1999)

The IPTL issue was raised at the Consultative Group meeting between Tanzania and donor agencies in Dar es Salaam in December 1997 and again in May 2000. In an interview with Reuters, European Delegation Head Peter Christiansen gave voice to continued donor concerns: ‘The European Union was concerned that the government was silent in cases where top ruling party officials and senior government officers were implicated as in the case involving Malaysian-backed IPTL.' (Guardian, 24 May 2000: 1)

Reuters' Mark Dodd left Tanzania in July 1998. He regretted that he had failed to get a final interview with President Mkapa ‘to ask about the role of the Attorney General and Minister for Minerals and Energy in the signing … of a contract … with IPTL … described by the IMF as “an unsustainable burden on the economy.”' He continued: ‘The IPTL saga also raises the nagging question of whether a small group of Tanzanian elite are (sic) so devoid of moral scruples as to ruthlessly exploit the long suffering Wananchi [citizens] for short-term gain under the guise of South-South co-operation. … Tanzanians are possibly the worst exploiters of Tanzanians…'. (Daily Mail, 15 July 1998)

The local press was used by both pro- and anti-IPTL groups. The state-owned Daily News and Sunday News regularly ran pro-IPTL pieces. Many of my articles and editorials were published in the Family Mirror and Business Times. Most of the time, the other English dailies and weeklies were prepared to carry my pieces. English and Kiswahili papers also carried pro-IPTL commentary, frequently ghosted, and during much of 1998, a healthy debate flourished. My files show that over 40 articles, letters and editorials on IPTL appeared in local English newspapers during the month of May 1998. Never has a single issue generated so much public controversy.

When Tanesco finally issued its Notice of Default, the local Transparency International Chapter Chairman, PriceWaterhouseCoopers' director Ibrahim Seushi, and I drafted a press release, which appeared in the Family Mirror, Business Times and the Sunday Observer (June 12 and 14, 1998) and in the launch edition of East African Alternatives (September 1998) (see Box 2).

Some Negative Tanzanian Comments on IPTL:
The Government remains committed to any and all legally binding agreements entered into with IPTL's foreign and local investors. … negotiations are underway to ensure that the tariff is based on actual, reasonable and verifiable capital and operating costs, a fair return to IPTL's investors, and an affordable tariff to TANESCO and the national economy. The Government cannot allow Tanzania 's electricity consumers and the economy to be burdened with extraordinarily high electricity tariffs.
President Benjamin Mkapa, the Express, 28 May 1998
Ruta[banzibwa] has been opposed to this project for quite some time. Even his bosses know this, and some of them have not been thanking him for it. It is generally known that his views on the subject were consistently given short shrift. Nor was he alone in this, because Tanesco voiced its objections only to find that it did not matter.
Jenerali Ulimwengu, former MP, media owner, the African, 24 April 1998 .
Had it not been for the donor agencies raising eyebrows, the whole controversial IPTL project would have been rammed down our throats with ugly consequences. Whilst the South-South cooperation in all matters is very much desired it should be only for the mutual benefit of South-South countries and not otherwise.
Nizar Fazal, investigative journalist, Business Times, 8 May 1998
Look at the contract agreement of MBI and IPTL. It is indeed absurd. Those who sanctioned on the part of the government or Tanesco should be put to task for mishandling these contracts. Their zeal of accumulating financial support should not cripple the economy of this country.
Brigadier General Joachim Burcard Ngonyani (Rtd), the African, 3 August 1998
In Tanzania we have a history of things going awry through negligence. Take the IPTL deal – those who signed on the dotted line and thus burdened the peasantry of this country with such a lop-sided deal, are probably sleeping quite soundly at night.
Hashim Saggaf, CCM Member of Parliament, the East African, 26 April 1999
Like Tanzania, most African governments are trying to encourage foreign investment, and many are selling off state-owned corporations or entering into management contracts with private companies to supply power and other public goods. If these worthwhile processes are corrupted by opportunistic foreign and local investors in collusion with public officials, then the move towards a viable and competitive market economy will be severely, perhaps definitively compromised.
Chairman and Board of Transparency International, Tanzania Chapter, June 1998

Finally, Tunku Abdul Aziz, board member of Transparency International and a major figure in the global integrity movement, lent his eloquent prose to the cause. He wrote:

The cancellation of the Malaysian power project by the Tanzanian authorities … has been a matter of great rejoicing in Tanzania because, rightly or wrongly, the perception is that the award of this major contract has been made in indecent haste, and without the accompanying transparency and accountability normally expected in an exercise of this nature. Other Malaysian investments in Africa … have been savagely criticised as being “not in the interests” of the countries concerned, and in all of them, again, rightly or wrongly, the perception is that Malaysian companies have bribed and are bribing their way into lucrative, near monopolistic, niches.
… such poor developing countries as Tanzania and Malawi … are already wrestling with massive problems of corruption, and the last thing they need are large doses of our “Made in Malaysia ” grease to turn the wheels of their bureaucracy and help entrench what can quite easily become a way of life. (East African Alternatives, September 1998, p. 23). [The story continue here>>]