Aid to the core countries
59 Document 3:12 2013–2014 Report
from NVE.
44
In an interview, NVE stated that the project manager in TANESCO is part of the management team for hydropower generation, and that the manager
actively contributes to the project’s activities and reporting to the embassy. While the project initially had a budget of NOK 25 million, this has since increased to
NOK 67.5 million due to a signiicant price increase for maintenance work and the expense for a hired consultant. The cost analysis was prepared in a feasibility study in
2009. It was, according to NVE, the basis of the original budget for the project, but turned out to be incorrect. The tenders that came in were over twice as high as the
estimate. This is partly due to real inlation and partly because it was not suiciently taken into account that the old power plants need spare parts that are no longer in
production.
45
The embassy agreed on this basis to increase the budget to a total of NOK 67.5 million. Since the maintenance work has not yet begun, just NOK 2.3
million had been spent at 31 December 2013 on the project, mainly on courses.
46
The maintenance work was advertised internationally as a single contract in March 2012, but resulted in one incomplete tender. It was then decided to split the invitation
to tender into ten diferent contracts. Negotiations with the tender winners were held in the autumn of 2013.
47
Start-up of the maintenance work was thus delayed by almost two years.
48
NVE stated that at the time of the decision to split the contract into ten contracts, it was also determined that NVE would, on behalf of TANESCO, hire an
external consultant with an engineering background to quality assure the work. This resulted in a NOK 7 million increase in the project budget.
The embassy in Tanzania stated in an interview that NVE does not have core compe- tencies in upgrading power plants, but that it was chosen as the Norwegian partner on
the basis of relevant experience with facilitating similar projects. In addition, NVE could be engaged on short notice without extensive and time-consuming tendering
processes. NVE stated in an interview that they assist TANESCO in obtaining the necessary technical expertise for the project, and that in this connection, they have
signed a framework agreement with the Norwegian power company Nord-Trøndelag Elektrisitetsverk NTE. This is in addition to the consultant who is to follow up the
agreements for TANESCO. NVE also pointed out that the embassy itself could have entered into consulting agreements directly, but that it wanted to take advantage of
NVE’s expertise in capacity development and project management. According to the Ministry of Foreign Afairs, the agreement with NTE has not yet been used in NVE’s
collaboration with TANESCO.
For there to be any long-term beneit of maintenance work, TANESCO must prioritise adequate maintenance. In an interview, NVE pointed out that TANESCO’s failure to
prioritise the maintenance of power plants over the past ten years raises questions. According to NVE, it is important to ensure the sustainability of the project to prevent
a new application for support and maintenance in ten years’ time. The embassy in Tanzania pointed out in an interview that TANESCO’s inancial crisis will continue to
create uncertainty about whether required maintenance will be prioritised and executed. The embassy stressed that it still makes economic sense to inance the
maintenance of power plants, because the power crisis in Tanzania will worsen if the hydropower plants break down due to decay.
44 Only the first part of the agreement is discussed here. 45 Interview with NVE on 12 September 2013 and TANESCO 2013 Meeting with officials from Auditor General of Norway, p. 3.
46 TANESCONVE 2013 Capacity building and emergency repair project of existing hydropower plants in Tanzania. Annual pro- gress report 2013, p. 7.
47 TANESCO 2013 Meeting with officials from Auditor General of Norway, p. 2; TANESCONVE 2013: Capacity building and
emergency repair project of existing hydropower plants in Tanzania. Annual progress report 2013, p. 5. 48 TANESCONVE 2013 Capacity building and emergency repair project of existing hydropower plants in Tanzania. Annual
progress report 2013, p. 8.
60 Document 3:12 2013–2014 Report
Renovation of the Wesha power station on the island of Pemba Zanzibar In connection with electriication projects in Zanzibar see Section 4.3.2, NOK 17.4
million was granted to repair the 30-year-old Wesha diesel power plant on the island of Pemba. At that time, the plant was the sole source of power on the island, and repair
of generators was considered necessary to ensure a stable power supply. According to Norad’s inal evaluation of the project, the repairs were delayed, which led to huge
budget overruns, partly because the original manufacturer of the generators was the sole producer of spare parts.
Due to lack of maintenance and knowledge of the extent of the problems at the power plant, the generators were still not working as they should when the inal evaluation of
the electriication projects was prepared in 2009. By the time the projects were completed, a modern electricity grid had been built on Pemba. According to Norad’s
inal evaluation of the project, there was, however, no stable power supply on the island before the Norwegian-supported subsea power cable was in place in 2010
see Section 4.4.1. According to the same evaluation, the challenges at the power plant were underestimated and should have been foreseen. The Ministry of Foreign
Afairs related that alternatives to repairing the old power station were considered. They were not prioritised because they would entail a large investment cost and
because it was considered detrimental to invest in non-renewable technology when the subsea cable to Pemba was already under production.