Mixed feelings on power generation project deal

SOME experts have questioned the aptitude of the Chinese company -- Sichuan Hongda Group which entered into a joint venture with the government last week to develop the Liganga iron ore and Mchuchuma coal mines.

In an interview with the 'Daily News' on Tuesday in Dar es Salaam a specialist in the petroleum, minerals and gas products said the Chinese company entrusted with the two projects worth US $3 billion has no experience in the mining industry.

"The company is not listed anywhere among the world companies dealing with mineral excavation or energy industry.

The recently signed contract seems to be its first ever and this is raising concerns over its capacity," said an expert who preferred anonymity.

Another mineral expert who is a lecturer with the Institute of Finance Management (IFM) Dar es Salaam Campus, Mr Camilus Kasala, tasked the government to state clearly the criteria used to get the Chinese investor, whose competency he cautioned was 'suspicious'.

"In the 500 Chinese companies top list issued every year by Beijing, the company is not among the performers and only appears at the 257th position in last year's chart. This raises questions over whether the company is able to invest so much in the said projects," he said.

The company's website shows that it specializes in producing chemical products, such as micro-fertilizer, feed-grade dicalcium phosphate, food-grade tricalcium, potassium nitrate, among other chemicals. It is also listed on China Shanghai Exchange.

Reacting to the claims, the Deputy Minister for Industry and Trade, Mr Lazaro Nyalandu, said that the government has trust in the Chinese company and has no reason to have a second thought.

"It took us a whole year to 'screen' and pick the right investor. 48 companies had shown interest and I can assure you Sichuan Hongda Group won on merit," he stressed.

Mr Nyalandu stated that the government was keen in the process which involved international consultants, advisers and inter ministerial teams.

He noted that critics of the Chinese company could have based their arguments on information obtained from the firms' website, cautioning that not all details are made available.

"China is the second largest world economy and ranking of companies in China should not be taken for granted. We have many Chinese companies in the country which are not listed as top 500," he explained.

The deputy minister noted that the company also has diversified interests in coal and metal which have market potential around the world.

The Deputy Chairman of the Parliamentary Committee on Public Organisations Accounts (POAC), Mr Deo Filikunjombe, stood firm for the government.

"I don't want to speak for the Chinese company, but I am glad that the government signed the contract. This investment will mark the beginning of the end of power crisis in the country," he said.

Mr Filikunjombe, the legislator for Ludewa where the two projects are located, said the joint venture was a response to MPs' call for the government to own shares in large investments.
"The government owns 20 per cent shares, which can be increased to 49 as per the contract.

All processing activities will be conducted at the mining site and this is also commendable," he stressed.

The legislator who attended the signing ceremony of the deal said it was too early to start raising criticisms on the investment.

Last week, the National Development Corporation (NDC) signed an agreement with China's Sichuan Hongda Group to implement Mchuchuma coal and Liganga iron ore projects.

Upon its completion, the Mchuchuma coal-power plant is expected to generate 600MW, 300MW of which will be used at the two mines, with the remaining power supplied to the national grid.

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