RATIN

Policies must be predictable, businesses tell govt

Posted on August, 3, 2017 at 10:19 am


By Alex Malanga

Tanzania Private Sector Foundation’s (TPSF) executive director Godfrey Simbeye made this argument on Wednesday in the city.

Dar es Salaam. Policy predictability is a crucial factor that can make local firms participate in large-scale projects such as the construction of the Tanga-Hoima oil pipeline in a more meaningful way, the private sector players have argued.

Tanzania Private Sector Foundation’s (TPSF) executive director Godfrey Simbeye made this argument on Wednesday in the city.

He was speaking at the occasion of mobilising local service providers in the oil and gas sector to use the emerging opportunities in the construction of Tanzania-Uganda crude oil export pipeline.

Mr Simbeye argued that without some level of policy stability, it would be difficult for local entrepreneurs to compete against the well capitalised, high skilled foreign firms.

President John Magufuli and his Ugandan counterpart Yoweri Museveni will be in Tanga on Saturday to lay the foundation stone for the 1,400-km pipeline, whose construction is expected to start soon.

Mr Simbeye advised that it would be crucial for the Tanzanian government to stick to the terms and conditions they agreed with Uganda during the whole process of the construction of the pipeline to guarantee returns for service providers.

“We need huge investments like that of the Tanzania-Uganda crude oil export pipeline, if Tanzania is to attain the middle income economy status by 2025,” noted Mr Simbeye.

He added: “To attract investors in these projects, the government should make its policies stable, so that investors would not be scared away.”

Besides, he said, policy stability can also work better if the local content section in the Petroleum Act, 2015, which guarantees participation of locals, will be dully enforced.

The construction of the $3.5-billion (Sh8 trillion) project, according to Association of Oil and Gas Service Providers’ (ATOGS) vice chairman Abdulsamad Abdulrahim, is expected to create about 10,000 direct jobs and 30,000 indirect jobs in the two countries.He said for locals to be able to win big construction tenders they will need to create their own brand.

Commercial banks, Mr Abdulrahim challenged, should also issue loans in a timely manner to those who win the tenders.

Mr Simbeye suggested further that there should be a special programme that would enable technology transfer during construction to enable Tanzanians stand a chance to handle such big projects on their own.

Mr Abdulrahim called upon service providers in the oil and gas sector to grab the opportunities emerging before, during and after the construction of the Tanzania-Uganda crude oil pipeline. “ATOGS wishes to assure the government that local suppliers have demonstrated capacity and readiness to deliver most of the services -- both technical and non-technical -- that will be required during the implementation of this project,” noted Mr Abdulrahim.

Mr Simbeye, on the other hand, also called on local service providers who would win specific jobs during the construction of the pipeline to deliver excellent work so as to built investor confidence on local suppliers when it comes to executing such big projects. “It is high time service providers demonstrated excellency in delivery of jobs especially when it comes to tenders of this scale,” argued Mr Simbeye. The services, according to him, will include construction, engineering, procurement of materials and logistics.

Others are indirect services, which include accommodation, transport, facilities management, operation and maintenance, insurance, financial banking, legal, security, catering and emergency services. “This will be a challenging task, which we are happy to take; knowing that it involves building capacity of locally available service providers to meet technical and service standards required by investors,” noted Mr Abdulrahim.

Vice President Samia Suluhu was recently quoted by a section of local media as saying that creation of environments whereby investors procure more services, labour and materials from local businesses which create employment and wealth in a country is often a vote winner. The deputy permanent secretary in the Ministry of Energy and Minerals, Ms Juliana Pallangyo, yesterday called upon ATOGS to provide building capacity to local oil and gas service providers.

 

Source: The Citizen