Saturday, July 30, 2011
Random Rant: Classless Barcelona
Wednesday, July 6, 2011
Waiting on South Sudan's Big Day
Wednesday, June 29, 2011
Politics and Power Cuts in Tanzania
................
Dear Erick,
Thank you for your email - and your good questions. I think the discussion on energy has taken an interesting tone and, as ever, characterized by finger pointing. For me, as an MP and the Chairman of Parliamentary Committee on Energy and Minerals, the most important question is how do we get out of current crisis. But, before that, we need to look at how we got here.
A bit of history.
All tragic stories begin with “once upon a time…”
So, once upon a time, there was no power cuts. Yes, those who were connected to the Grid were relatively few, but had power most the time. Today, those connected to the Grid do not get power most of the time. Question is: what happened? The simple answer is: we did not invest in power generation, and transmission and distribution system to keep up with increasing demand. This is the crux of the matter.
Why did we not invest? I will explain a bit. The critical period in the history of electricity in Tanzania was between 1996 and 2006. In 1996, at the height of privatization fever, we decided that TANESCO should also be privatized. So, it was “specified” i.e. put under the list of companies to be privatized. This meant that no investment was undertaken – in generation, in transmission and transmission systems and in human resource in TANESCO – except for a couple of donor-funded projects that were in the pipeline already.
So, while no major investment was undertaken, the following also took place between 1996-2006:
1. Faster growth of the economy – at an annual average of 7 percent. And the drivers of this growth were big energy consumers – mining, construction and telecoms.
2. Initiation and expansion of the donor-driven rural electrification program.
3. Growth of SME sector which relied on power – garages, salons, etc, and medium industry, including packaging and so forth.
So, by 2002, 5 years after the decision was made, TANESCO was still not ready to be privatized. It was therefore decided to bring a private management company to run TANESCO and prepare it for privatization. Enter NetGroup Solutions from South Africa. The management contract was (initially) to run for two years and was funded by the Swedish government. It was further expanded to two more years until 2006. Whether or not NetGroup delivered per contract, and whether or not the engagement was a good idea, are matters of debate until today. In the provision of the contract, there was a bonus (beyond management fee) to be paid to NetGroup if they improved the financial condition of TANESCO. Of course they did so (and got the bonus) by doing two things: they succeeded in collecting massive amounts of unpaid bills – even from the Army, and other notorious defaulters including many government agencies. They even went after Zanzibar! They also heavily relied on hydro (they went even below allowed Mtera depth) for generation so as to minimize the costs. As a result, TANESCO's balance sheet improved. But the decision to rely entirely on hydro had its costs - some of which we are seeing today.
So, in 2006, the decision on the fate of TANESCO was finally made: we will not privatize it. So, in essence, these were lost 8-9 years. Then, from 2006 – now, we entered a new phase: a phase of emergency power, and politicization of power sector. And this is entirely another story. But, it is worth remembering that, during the last five years (2006 – 2011), we have only managed to put up 145MW of our own generation while the new increased demand per annum is 100-120MW. So, while we need to catch up fast and close the gap, we are still falling behind even on the new demand.
So, this is where we are. A country of 43 million people, with meager 1,117MW installed capacity, and production of 630MW as of today. This is miserable, to say the least.
But, the critical question is: how do we get out of here? And, most importantly, beyond the question of power cuts, how do we bring electricity to majority of Tanzanians who have not had it since the beginning of the earth?
What to do end power cuts TODAY?
There are two components to producing electricity: generators and fuel. While we need and can do with more generators, TODAY the crisis is of fuel: not enough gas to run Symbion plant to capacity; in some cases, TANESCO is asked by gas suppliers to lower generation in its own two gas plants because of low gas pressure; no fuel to run IPTL plant; and no water to run hydro turbines.
So, the immediate solution is to sort the fuel issue. Why: because, even if you are able to airlift a 300MW gas power plant to Dar today, you will get Zero power as there is simply no gas. It is not that there is no gas in the country. It is just that we haven’t planned well to get it (from SongoSongo and Mtwara) to where the generators are at critical moment and/or those foreigners controlling our gas have not allowed for this to happen.
So, we should sort fuel issue. To start with, we need to buy fuel for the IPTL plant. While this is painful, it is necessary. The cost of producing one unit of electricity at IPTL is 32 cents, and TANESCO sells electricity for 10 cents. So, basically we are buying power from IPTL at loss. But then again, for one unit of electricity that is not produced, the cost to the economy is US$1.1. So, the costliest power is still cheaper than not having it at all.
In addition, the government should sort out the gas issue. The situation as it stands today is scandalous. The bottom line is that we have gas in Tanzania but we do not control its production, its transportation, its distribution and its price. We might as well be importing it via tankers from Qatar. If, for instance, today we have just enough gas to produce only 100MW of power, it will not be directed to TANESCO gas plants (where we do not pay capacity charges) but to Songas plant (where we buy power and pay capacity charges). I even worry if the upcoming TANESCO (Jacobsen) gas plant to be commissioned in December 2011 will have gas to run on. If it wont, then this will be a scandal because we contracted it and we knew of its arrival 18 months ago. We will deal with gas issue in detail in our Committee report to the Parliament later next month. We will have to make some bold proposals.
In the interim, to cover for the shortage of gas, the government should compel Songas and Symbion to invest in combine-cycle turbines to produce more power from steam coming out of the current gas turbines – and wasted in the air. In other countries, if you use jet engines (as in Symbion and Songas plants), you are compelled by regulation not to “waste steam” that can produce additional power. (TANESCO's Wartsilla gas plants use piston engines that do not produce sufficient steam/force to enable a combine-cycle system). This is just an issue of government being assertive and change the regulation given the current emergency situation.
In the medium term, we seriously need to look at the tariff structure. We need to decide in this country whether electricity is a business or service. The current tariff is not commercially viable. Full stop. EWURA sets the price of tariff after receiving request from TANESCO. Of course they do a diligent job of looking at the cost and whether they are "prudently incurred". But then they call a public meeting to ask people what they think of the tariff request. Then people and politicians go there and bully everyone into a lower tariff. Of course TANESCO could do better to cut some of its costs so as to produce electricity cheaply, but we have to realize that 36 percent of tariff is a result of capacity charges, which TANESCO can do nothing about (at least for now) and therefore the more we do away with these the better, and the more TANESCO gets power from its own sources the more it is able to sell it cheaply. Even the government knows that the current tariff does not work. That is the reason it is subsidizing to the tune of 5bn shillings per year a private company in Mtwara to sell electricity at a price equal to TANESCO!
Not only does the current tariff hurt TANESCO balance sheet, it also discourages private investment in energy sector, particularly in alternative energy. For instance, for a solar generation to be commercially viable, the tariff has to be in the upwards of 20 cents (mostly because of the heavy initial investment), likewise with wind power. No one will come here – only to sell power to TANESCO at price below 10 cents.
People may say that it is impossible for poor people to afford higher tariff. I don’t believe so. Look at how much poor people are spending on phone airtime. And the tariff structure is such that TANESCO sells power at the same rate be it to a barber shop in Namanga or Barrick Gold Mine in North Mara. The tariff should be dynamic and flexible given the volatility in the fuel prices and different capacities of TANESCO customers. There are those who will be willing to pay higher tariff as long as power is steady and reliable. With industries, power, even at higher price, feature very insignificantly to the cost of production but when it is NOT available it is a very significant contribution to losses. For me, for the poor, the prohibitive cost is the electricity connection cost – at 500,000 shillings at a go, most rural people can’t afford it. If the tariff will continue to not reflect the cost of producing power, TANESCO will continue to underperform and investors will be less inclined to come (recently TANESCO announced a tender and the most competitive bidder offered to sell power to TANESCO at 1,028 shillings while TANESCO sells power for 157 shillings!) or will seek to make money off capacity charges.
Now, as we look for solutions to the power crisis, we also need to look at TANESCO (as our sole power producer and distributor at the moment) itself. What do we need to do to it? What is its cost structure? On the ground, and given the assets it owns, this company should be the pride of Tanzania. Last year, it sold power worth about 500bn shillings. Few companies in Tanzania can match that kind of revenue. And it has assets worth $1bn (more than 1.5 trillion shillings) and more than 5,000 employee. It has the potential to triple the assets and revenue in 5 years if the right decisions are made. But, what are those and why aren’t they being made. I will not dwell much on this as this thing will be longer (and will go beyond the issue of power cuts) and I will let my friend Zitto whose Committee deal with parastatal finances to chip in on this. But, suffice it to say that, we have a sleeping giant in TANESCO, and people ought to be much more thoughtful in their calls for its split and/or privatization.
But I agree that TANESCO has to do better. At the moment, it spends 70 percent of its revenue buying electricity from Songas – which only has about 15 percent of installed capacity. This is painful, and needs to change. Also, while it is required by best [utility] industry practice to spend 12 percent of revenue on Repair and Maintenance, TANESCO spent only 2.8 percent of its revenue on R and M between 2005-2008 – and result is lots of broken transformers and service lines and a huge amount of lost electricity. TANESCO needs to invest in transmission and distribution system as part of the solution to the current power crisis. Last year, mainly because of poor transmission and distribution infrastructure, TANESCO lost 21 percent of power it produced and/or bought. This lost electricity amounted to more than 1,200 GWhr – which is more than all electricity used in factories and businessplaces for the entire year, and amounted to about 75 percent of all electricity bought from Songas in the entire year. These are massive losses – which, if curbed, in themselves would have helped with the power situation.
I want to wind up as I am just on a roll – and can’t seem to finish. But last point: we need to manage better private [prospective] investors in energy sector. There is a lot of bureaucracy and red tape within government where people come in with project plans and proposals and end up going in circles in government offices and end up being captured by middlemen and influence peddlers - and eventually corruption kicks in. There are projects that should have been in the pipeline now but were delayed because of bureaucracy and our incapacity to deal with their complexity. Also, we need to be serious on how we handle energy projects. Most energy investors dedicate a team of around 20 people in a single project – lawyers, finance people, etc. Power projects are very complex. I feel that we in government aren’t looking at them as such. We assign 4 or 5 people who already have other tasks in the Ministry to look at these projects and engage these guys. There ought to be a full time project management team at the Ministry that will live and breath power projects everyday and how to get them executed faster and to the benefit of the country. And I also think that there are many clever energy financing avenues that we haven’t explored thoroughly, and have been stuck in the traditional grants, loans and treasury guarantees.
Finally, the government has plans to do 2,780MW by 2015. This is quite an ambition, and will go long way towards covering the gap and catching up with the demand. I like it when we think big and attempt big things. But to achieve it, we need to do better than business as usual.
So, these are some of my thoughts. You also asked me clarify on my comment on Minister Ngeleja. I didn’t want to dwell on people and personalities. As you can see, there are enough issues to fill many paragraphs. As a Member of Parliament, I will continue to ask these questions and advice the government to make the right decisions and policies. As MPs, we will hold the government (via Minister responsible) accountable for its promises in the Parliament, and we will demand answers (including answer to my letter), and the appointing authority will have to judge on his Ministers' performance. But to say that the Minister is a source of power crisis in Tanzania is being simplistic. And I am not one to jump into simple answers. I have realized that part of my problem as a politician is that I am probably too nuanced, and should probably have chosen academia. But I believe that we can do better as a people to embrace nuance and complexity.
As Chairman of Parliamentary Committee on Energy and Minerals, people always ask me when will these power cuts end? In my PERSONAL view, intermittent power cuts will continue until 2013. And this is being optimistic. Leaders will have to be honest that it may be impossible to completely end the current phase of power cuts before the end of the year.
Call me if you have further questions,
Best regards,
January Makamba (MP)
Chairman of the Parliamentary Committee on Energy and Minerals
Dodoma
June 29th, 2011
PS: The views in this email are my own, not Committee's.
Monday, June 27, 2011
Paine's Perspectives on Religion.
I believe in one God, and no more; and I hope for happiness beyond this life.
I believe in the equality of man; and I believe that religious duties consist in doing justice, loving mercy, and endeavoring to make our fellow-creatures happy.
But, lest it should be supposed that I believe in many other things in addition to these, I shall, in the progress of this work, declare the things I do not believe, and my reasons for not believing them.
I do not believe in the creed professed by the Jewish church, by the Roman church, by the Greek church, by the Turkish church, by the Protestant church, nor by any church that I know of. My own mind is my own church.
All national institutions of churches, whether Jewish, Christian or Turkish, appear to me no other than human inventions, set up to terrify and enslave mankind, and monopolize power and profit.
I do not mean by this declaration to condemn those who believe otherwise; they have the same right to their belief as I have to mine. But it is necessary to the happiness of man, that he be mentally faithful to himself. Infidelity does not consist in believing, or in disbelieving; it consists in professing to believe what he does not believe................
Each of those churches show certain books, which they call revelation, or the word of God. The Jews say, that their word of God was given by God to Moses, face to face; the Christians say, that their word of God came by divine inspiration: and the Turks say, that their word of God (the Koran) was brought by an angel from Heaven. Each of those churches accuse the other of unbelief; and for my own part, I disbelieve them all...................................When the Church Mythologists established their system, they collected all the writings they could find, and managed them as they pleased. It is a matter altogether of uncertainty to us whether such of the writings as now appear under the name of the Old and New Testament are in the same state in which those collectors say they found them, or whether they added, altered, abridged, or dressed them up.
Be this as it may, they decided by vote which of the books out of the collection they had made should be the WORD OF GOD, and which should not. They rejected several; they voted others to be doubtful, such as the books called the Apocrypha; and those books which had a majority of votes, were voted to be the word of God. Had they voted otherwise, all the people, since calling themselves Christians, had believed otherwise — for the belief of the one comes from the vote of the other. Who the people were that did all this, we know nothing of; they called themselves by the general name of the Church, and this is all we know of the matter.............................................
The very nature and design of religion, if I may so express it, prove even to demonstration that it must be free from everything of mystery, and unencumbered with everything that is mysterious. Religion, considered as a duty, is incumbent upon every living soul alike, and, therefore, must be on a level with the understanding and comprehension of all. Man does not learn religion as he learns the secrets and mysteries of a trade. He learns the theory of religion by reflection. It arises out of the action of his own mind upon the things which he sees, or upon what he may happen to hear or to read, and the practice joins itself thereto.
When men, whether from policy or pious fraud, set up systems of religion incompatible with the word or works of God in the creation, and not only above, but repugnant to human comprehension, they were under the necessity of inventing or adopting a word that should serve as a bar to all questions, inquiries and speculation. The word mystery answered this purpose, and thus it has happened that religion, which is in itself without mystery, has been corrupted into a fog of mysteries....
Thursday, June 16, 2011
On Tanzania's Growing Population
Thursday, June 9, 2011
An Insane Economic System
Sunday, June 5, 2011
Irresponsibility of Some of Tanzania's Media
In Tanzania we have been enjoying free of speech unparalleled by many countries in this planet. However, there has been a trend of gross irresponsibility by our journalists and the public have been constantly fed by ridiculously articles. I ran into this piece published by RAIA MWEMA on June 1st, 2010, that demonstrated the sheer negligence of professionalism and ethics of fine journalism. Somebody, should get Jenerali Ulimwengu (whom I greatly respect) to read the articles that his affiliated newspaper is publishing.
Here is the piece and some comments that I inserted.
Wednesday, June 1, 2011
The Fallacy of Donors' Driven Health Agenda
Thursday, May 26, 2011
Thursday, May 19, 2011
Cornel West on deception of Barack Obama
“He feels most comfortable with upper middle-class white and Jewish men who consider themselves very smart, very savvy and very effective in getting what they want,” he says. “He’s got two homes. He has got his family and whatever challenges go on there, and this other home. Larry Summers blows his mind because he’s so smart. He’s got Establishment connections. He’s embracing me. It is this smartness, this truncated brilliance, that titillates and stimulates brother Barack and makes him feel at home. That is very sad for me."
On Michelle Obama
I can tell her I’m sorry it offended you, but I’m going to speak the truth. She is a Harvard Law graduate, a Princeton graduate, and she deals with child obesity and military families. Why doesn’t she visit a prison? Why not spend some time in the hood? That is where she is, but she can’t do it.
On Barack's economy team
He bitterly describes Obama as “a black mascot of Wall Street oligarchs and a black puppet of corporate plutocrats. And now he has become head of the American killing machine and is proud of it.”........The first announcement of Summers and Geithner I went ballistic. I said, ‘Oh, my God, I have really been misled at a very deep level.’ And the same is true for Dennis Ross and the other neo-imperial elites. I said, ‘I have been thoroughly misled, all this populist language is just a facade. I was under the impression that he might bring in the voices of brother Joseph Stiglitz and brother Paul Krugman"
On Barack's defense, I think governing a 450 million democracy is not easy especially in a country whose political system was designed to frustrate radical changes. Edmund Burke and early thinkers thought this was a way to avoid radicals from creating fresh difficulties in their attempt to re-engineer the society. I think he could do more for progressives and moralists out there (himself is one of them) but he is governing an institution rigged with ideologue that requires compromises to get things done. The Kennedys (Bobby & Jack) were progressive and didn't last very long. Bobby didn't even made it to the presidency, maybe Barack want to enjoy his social security.
and you can read the whole interview here
Sunday, May 8, 2011
A Radical Experiment in Empathy
Friday, May 6, 2011
Malaysia New Economic Model
Wednesday, May 4, 2011
Deadly Collabo?
Wednesday, April 27, 2011
Thoughts on Health Inequality
Thoughts on Health Inequality
By Thuwein Y. Makamba
Improving health inequality doesn’t necessarily increase health equity; Sen argued that distribution of wealth in a fashion that will make overall society unhealthy is not the right way to pursue health equity. In many low income countries, the pie is too small to be distributed to everybody, and it is suggested to let economies grow first before implementation of egalitarian social policies. However, in societies like United States where the pie is already big, it is imperative to implement social policies that will improve social determinants of health and provide everybody capabilities to achieve good health. However, policy makers must understand that providing capability for citizens to achieve health doesn’t mean they will achieve good health. This is explained by the idea of “subculture of poverty” brought by anthropologist Oscar Lewis who argued that poor people have sense of dependence, of not belonging, and are marginalized in their own country. These people (poor) are convinced that existing institutions do not serve their interest or needs. In response to this, it is imperative that when improving social determinants of these populations’ health, the behavioral change component should also implemented in parallel with improving education status.
Providing healthcare for all and implementing policies that will improve social conditions for the poor is a moral decision, and decisions in morality are non-uniform amongst politicians and policy makers. United States political ideology (premises of Washington Consensus) is highly influenced by early political thinkers like John Locke who argued that “every man has a property in his own person. This nobody has any right to but himself. The labor of his body, and the work of his hands, we may say are properly his.” This thinking has shaped a society in a way that it is not accepted to distribute one’s income, because the labor is the unquestioned property of the laborer. This explain why more egalitarian social policies are not acceptable in United States, despite the evidence of immense sufferings to those disadvantageous social groups. And the fact that the idea of ‘unquestioned property of the laborer” is only valid when there was the same level of equality to begin with. The critics of equal social policies are negating the notion of accident of birth, which it was not in poor people choosing to be born in conditions with poor determinants of health.
Those who disputes ideas of equality often say that “it is better that some should be unhappy than that none should be happy”. Although this thinking is flawed because equality can also means that everyone should be happy. Also, it also known that wherever health inequalities are greatest the overall health status of the population is lower. Therefore it is in everybody interest to adopt the policies that would improve health equity of the society. The only inequality that should be allowed is that if it would benefit those who are least well-off, argued by John Rawls in his Difference Principle. But this Rawls’ accepted inequality would only be tolerated if it will improve equity rather than bringing everybody down.
The marker for moral excellence in our society should be based on how we can avoid premature deaths, and needless illness. We have signed a social contract with our governing institutions to pursue equal justice for all and this include giving everybody the chance to pursuit of healthiness regardless of their social status or income.
Monday, April 25, 2011
Saturday, April 23, 2011
Making high impact drugs cheap from day one!
Monday, April 18, 2011
Technology Diet?
A study by the Kaiser Family Foundation released in January 2010 concluded that 8- to 18-year-olds devote an average of seven hours and 38 minutes to entertainment media per day. But because they dedicate so much of that time using more than one medium at once - say, scanning Facebook as they listen to music and chat with friends - they actually pack in about 10 hours and 45 minutes of content in that period..............A team at UCSF published a study last week that found further evidence that multitasking impedes short-term memory, especially among older adults. Researchers there previously found that distractions of the sort that smart phones and social networks present can hinder long-term memory and mental performance.
Monday, April 11, 2011
Dalai Lama on Humanity
Thursday, April 7, 2011
The Future of Advertising or Publicity Stunt?
Sanchez used to work at his local Ecko outlet store and says his wardrobe is mainly Ecko. And at only $100 for the tat, Sanchez expects that the stunt will pay off. When asked if he was satisfied with the 20 percent reduction, Sanchez remarked, "It should be [at least] 30 percent which is employee discount." He added that he's already showed his body art to the Ecko employees, who told him he's welcome to shop anytime.
It would be interesting to see if the alcohol industry will offer this kind of promotion, or tech giants like Apple.
Saturday, March 26, 2011
The Case for Strong Social Policies & Human Development
Botswana has per capita income of $13,204 in 2008, while Costa Rica has a lower per capita income of $10,870. But Costa Rica has a life expectancy of 79 years and under five mortality rates of 11 yrs/1000 live births. By contrast Botswana, with its rapid economic development ranks low in human development indicators and has life expectancy of 55 years and child mortality of 31/1000 live births. How do u explain this disparity? Its not entirely on HIV and AIDS. Besides, HIV is an epidemic.
Economic development alone in terms of GDP growth or Per Capita income doesn't cut it, if there is no strong social policies to curtail inequality.
