Dangote Cement has suspended production since last week. The action is due to a dispute over natural gas supplies to the plant. The issue will be of considerable concern to investors in the power and industry sectors, who would expect to rely on natural gas supplies.

Last month Tanzania Petroleum Development Corporation (TPDC) claimed that an offer to supply natural gas was available on the table at US$5.12 per MMbtu, compared to the US$4.75 that Dangote was willing to pay. TPDC claimed that Dangote had later reduced its offer to under US$4.

There have been genuine administrative delays in getting this off the ground. The Natural Gas Pricing Regulations were only released at the end of last month. Staff in all the relevant agencies are severely stretched between the Uganda pipeline project and the LNG project. But there is also an underlying suspicion of any project that was entered into under former president Jakaya Kikwete’s administration. There is concern about potential scandals and rumours that Tanzania’s first US$ billionaire, Rostam Aziz, may still have a stake in the project. Rostam was the representative of the Dowan Holdings, which was the former owner of the Ubungo gas-fired generating plant that is now owned by Symbion Power.

Last month Minister for Energy and Minerals, Sospeter Muhongo, questioned why Dangote Cement was not raising these concerns through the ministry’s ad hoc committee (East Africa Politics & Security – 01.11.16). Such a response is not untypical of the Tanzanian public service that establishes ambiguous mechanisms, and insists that they be followed, even if official channels have been used.

Other investors are also in a bind. Symbion Power’s Ubungo plant in Dar es Salaam remains idle as it continues to resolve its contractual disputes. The Ferrostaal-led consortium — which is negotiating for a fertilizer plant in Lindi Region — met the Deputy Permanent Secretary, Energy and Minerals, Juliana Pallangyo last week. According to Pallangyo the main item on the agenda was access to land and the gas price. Minister Muhongo had assured the National Assembly that land was available in his budget speech in May 2016. Pallangyo’s update this week, is that residents have been compensated and that TPDC is awaiting land title.

On natural gas pricing, no agreement has been reached yet. In a TPDC report of the meeting, Pallangyo listed the organisations that are involved in determining a supply price. They include — for reasons best known to her — the Petroleum Upstream Regulatory Agency (PURA), which has no remit in this issue.