A LOCAL company, VIP Engineering and Marketing Limited, has maintained that all the money that was deposited in the escrow account at the Bank of Tanzania (BoT) belongs to Independent Power Tanzania Limited (IPTL). A Statement issued in Dar es Salaam by the International Independent Consultant with VIP Company, Mr James Rwegemalira, to a team of lawyers, doctors and other experts reads: “It is VIP’s strong view and understanding that the Escrow Account monies at the BoT, at all material times, belonged to IPTL. Mr Rwegemalira pointed out that VIP Company also believes that Standard Chartered Bank Group was not a creditor of IPTL while it has also caused a lot of damage not only to his company but to Tanzania Electric Supply Company Limited (TANESCO) and to the government.
He advised that Tanesco and the government should take legal measures against Standard Chartered Bank for the recovery of the damages allegedly caused “as what VIP Company has done”.
The company has already commenced a civil suit at High Court against the bank, claiming not less than 490.09million US dollars (about 787bn/-). Mr Rwegemalira, therefore, called anybody who has claims against VIP to apply for leave of the High Court of Tanzania to make counter claims in the case.
One of the VIP Company lawyers, Dr Camilo Schutte from Amsterdam, Netherlands, asked the government of Tanzania to tell the public the truth on the position regarding monies that were in the escrow account.
“Leaving other people to speculate and going on giving misleading information about the money is not proper. Facts are available that clearly shows that the money in escrow account do not belong to the public. It is privately-owned money,” the lawyer insisted. He also advised members of the public to take keen interest by reading court records from the High Court of Tanzania and other records concerning the IPTL from other jurisdictions in United States and other parts of the world “to know the truth about the matter”.
Clarifying more on the matter, Mr Rwegemalira pointed out that VIP Company has been going to court since 2002, complaining against the non-registration of its payment in kind of 13.5 million US dollars for its 30 per cent equity in IPTL.
The company had also been complaining about fictitious debts, which Mechmar Corporation (Malaysia) Berhad was oppressively foisting upon IPTL. VIP requested the High Court to compulsorily appoint a Provisional Liquidator of IPTL to investigate the allegations.
The Liquidator of IPTL produced two interim reports, which allegedly prima facie confirmed VIP’s allegations. In 2005, Standard Chartered Bank purported to have bought debts of IPTL, from the original lenders of IPTL, whom VIP was accusing to be conspiring with Mechmar.
In 2006, VIP politely and diplomatically requested the government and Tanesco to continue buying IPTL power as per the Power Purchase Agreement (PPA) but to deposit the monthly capacity charges of the disputed invoices of about 2.6 million US dollars into the Escrow Account.
Following such request, the government, IPTL and BoT established an IPTL Tegeta Escrow Account for the benefit of only IPTL and GoT and not creditors of IPTL, into which some of the IPTL disputed invoices were being deposited instead of being paid to IPTL.
In July 2013, the Standard Chartered Bank, through the government requested VIP to withdraw in the public interests the petition for the compulsory winding up of IPTL.
VIP agreed on conditions that it shall be entitled to continue with its claims for damages totalling more that 485million US dollars, which it had already commenced in the USA Supreme Court in New York against Standard Chartered Bank since June 10,2013.

Apparently, the negotiations between Standard Chartered Bank and VIP under the mediation of the Government failed. It was at that point when Pan Africa Power Solution (PAP) commenced negotiation and subsequently purchased VIP’s 30 per cent shares in IPTL.

The VIP agreed to withdraw the petition for winding up IPTL with conditions that PAP shall pay to VIP 75.0million US dollars to acquire its shares, commits before the High Court pay off all legitimate creditors of IPTL and expand the Power Plant Capacity from 100 MW to about 500MW as soon as possible.

PAP was also required to commit itself before High Court that IPTL shall charge Tanesco a tariff of between US Cent 6/kWh (TZS 100/unit) and US Cent 8/kWh (TZS 130/unit), making the capacity charges the cheapest in the country.