By Correspondent, Makangale Satelite
THE
Fate of billions of money deposited in the “Escrow Account” hangs in the
balance, as fresh disputes erupted among interested parties-IPTL and Standard Chartered
Bank-Hong Kong--over the money, a situation which could possibly take the
crisis-ridden power firm, IPTL, back to the old days of conflicts.
Reliable
sources in the government circles exclusively told Makangale Satelite that the
new owner of Independent Power Tanzania Ltd (IPTL), “Pan Africa Power Solutions
Ltd (PAP) has started withdrawing the money from the restricted “Escrow
Account” at the Bank of Tanzania (BOT), while there still some issues which are
yet to be resolved.
 |
|
The
Governor of Bank of Tanzania Prof.Benno Ndulu
|
Basically,
Escrow Account was created in the wake of protracted legal wrangles pitting
various interested parties--between former IPTL partners (VIP Engineering and
Marketing (30 per cent) and a Malaysian firm, Mechmar Corporation (70 per cent)
on one hand, and Tanesco and IPT, on the other—under a strict condition stating
that nobody should touch Escrow’s Account money until all disputes have been
resolved.
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| Energy and Mineral Minister Prof Sospeter Muhongo |
According
to reliable sources, the new owner of IPTL, “Pan Africa Power Solutions Ltd
(PAP) has already withdrawn around USD 110 million from the Escrow Account, a
move which Standard Chartered Bank Hong Kong (SCB) criticized as “wrong and
contrary” to the terms and conditions associated with the setting up of the
Account at BOT.
However,
PAP bosses defended their actions, saying that they have the right to access
the money and all properties, assets of IPTL as hundred percent owners of the
power company.
“A
High Court Verdict in Tanzania gave us (PAP) the powers to access all
properties, assets including access to the money deposited in the Escrow
Account,” said Joseph Makandege, IPTL’s Company Secretary and Chief Counsel, in
an exclusive interview with this social media.
According
to the official, the High Court had recently granted all requests by VIP
Engineering and Marketing, which had minority shares (30 per cent) in IPTL,
which it had sold to PAP. Among other requests granted by the court, according
to Makandege, include VIP’s rights, interests, asserts, including monies in the
Escrow Account at BOT, be handed over to the new owner, PAP.
“On
the basis of the High Court ruling, we have the right to access the money in
the Escrow Account,” said company’s secretary, dismissing claims by Standard
Chartered Bank-Hong Kong as “baseless.”
According
to the ruling, PAP had committed to pay off all legitimate creditors of IPTL
and to expand the plant capacity to 500MW and sell power to Tanesco at tariff
ranging US dollar cents six to eight per unit in the shortest possible time
after taking over in the public interests.
“If
they (Standard Chartered Bank Hong Kong-SCB HK) have genuine claims, as
creditors, they should submit them to us (IPTL) for assessment and
consideration for repayment. Note that submitting claims is one thing, and
being paid is another thing…but they (Standard Chartered Bank-Hong Kong) have
to submit their claims, and we have to assess these claims before making
decision,” said IPTL company secretary.
But
in an email sent to this reporter from Hong Kong, Mr. Joe Cassano, a key figure
who has been involved in the prolonged negotiations (on behalf of Standard
Chartered Bank Hong Kong), objected PAP ‘s decision to withdraw the Escrow
Account money before settlement of the parties’ claims.
He
says the escrow account was set up to safeguard the funds from Tanesco until all
disputes around the creditors and investors in IPTL have been resolved.
“The
recent ICSID (US-International Centre for the Settlement of Investment
Disputes) ruling now sets out a pathway for taking this forward. Until this is
completed we would not expect the escrow account to have been touched.
As
a long standing and substantial creditor of IPTL, SCB HK is expecting to be
repaid. The ICSID ruling set out a methodology to reach the number," said
Cassano, adding that “Standard Chartered Hong Kong remains determined to find a
negotiated settlement with all parties.”
According
to sources in the energy sectors, SCB HK has some interests in the Escrow
Account’s money, claiming around USD 140 million, a claim IPTL officials
rejected as “unrealistic and exaggeration.”
“It’s
not true that SCB HK demands such amount of money from us…there was almost
around USD 122 million in the Escrow Account…saying simply that they claim USD
140 million is quiet unrealistic. After all, this is our money as hundred per
cent owner of IPTL. But if they have genuine claims (as creditors) they should
submit them to us for assessment?” queried Makandege.
PAP,
according to him, has already started settling debts of other IPTL creditors
who had submitted their claims to the company, urging SCB HK to do the same.
Makandege
added that the Escrow Account money has been converted into Treasury bills,
which they use to pay the creditors (step by step) as they mature, refuting
speculations that they had withdrawn cash money from the account.
Long-time
government efforts to resolve the deadlock in IPTL have hit some snags, as
parties fails to agree on key issues.
“At
one time, I called both parties--IPTL and Standard Chartered, as a way of
trying to mediate their dispute…they did not reach consensus, but I will keep
on trying to mediate them on these issues,” said Energy and Mineral Minister,
Prof. Sospeter Muhongo, in an exclusive telephone interview, describing IPTL
off-and-on crisis as “a complex and complicated story.”
“In
fact, the government is not concerned with IPTL affairs, this is purely a
private issue, but I we thought it’s a worthwhile idea to intervene and assist
conflicting parties to reach agreement. That’s why I volunteered to mediate
these discussions. We want to clean up image of our country, we don’t want our
country to be seen as a place of endless conflicts, taking into account that
IPTL crisis had been going on around the court’ corridors for years,” added
Muhongo.
Ends
Photos:
Prof Sospeter Muhongo
Central
Bank Governor Professor Benno Ndulu
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