Gas processing plants cost additional 210bn/-

TPDC Board Chairman, Mr Michael Mwanda.

CONSTRUCTION of the gas pipeline from Mtwara to Dar es Salaam in addition to processing plants at Madimba and Songo Songo have cost the government additional US $105 million dollars (about 210bn/-), it has been revealed.

Board Chairman of the Tanzania Petroleum Development Corporation (TPDC), Mr Michael Mwanda, said costs for implementation of the mega project surged from US $ 1.225 billion to US $1.330 billion dollars during the course of its execution.

"The project was implemented through a soft loan from the government of China to the tune of 95 per cent while the government of Tanzania was to fund the remaining five per cent.

"However, the government had to dish out additional funds apart from the five per cent obligation since there are some components which were not included in the initial plan," Mr Mwanda explained.

He made the remarks at Madimba Processing Plant in Mtwara at the end of a five-day inspection tour of the project by the TPDC's board of directors and management.

Mr Mwanda was nevertheless contented that the project has been completed and set for commissioning by early next month.

According to the Board Chair, construction of the 500 plus kilometre pipeline cost US $875.7 million dollars while the processing facilities at Songo Songo and Madimba consumed US $150.7 and US$ 197.9 million dollars, respectively.

He mentioned the added costs as those used to compensate people whose land was taken to create a leeway of the pipeline from Mtwara to Somanga Fungu and widening of the leeway from Somanga Fungu to Tegeta.

"Purchase of land to construct gas receiving stations and processing plants as well as extra costs for contractors added to the construction costs of the project.

The project kicked-off in June, 2013 and was undertaken by China Petroleum Technology and Development Corporation (CPTDC) as main contractor and a South African-based firm, Worley Parsons, as consulting engineers.

Mr Mwanda was optimistic that power consumers will enjoy lower tariffs through gas-produced electricity which attracts between 6 and 8 US cents per unit compared to between 32 and 35 US cents on fuel-powered generators run by independent power producers.