The private-public partnership deal in Tanzania involving Energem Resources Ltd., Infrastructural Development Finance PTY (IDF) of South Africa, and the state-owned Rufiji River Basin Development Authority (Rubada) is set to be investigated by the Office of the President to determine whether the parties followed public procurement rules when signing the contract.
In an article published in The EastAfrican, the chairman of Rubada, Professor Raphael Mwalyosi, confirmed that the Office of the President had ordered that the deal be blocked until it receives the go ahead from the government. "Yes, we have been ordered to block the Canadian firm because of technical irregularities," he said.
Energem, in May 2008, announced that it had executed a MoU with IDF under an arrangement that had it gaining a 40% stake in the proposed 900 MW hydroelectric project, the Stieglers Gorge Hydro-Electric Scheme in Tanzania. Under the MoU Energem was to advance $1.2 million for an update of feasibility studies conducted in the early 1980s under a Norwegian government initiative. The Norwegian funded study, while qualifying at the time in respect of all engineering and environmental considerations, was shelved due to insufficient regional electricity demand at the time to justify economic viability.
In June Energem said that the review of the historic studies had been completed and they were comprehensive and of a high standard and would only require limited updating to bring them up to current standards for internationally acceptable bankable level. Energem also announced that based on a recent review of the information available from the historic feasibility study, the construction of the proposed dam would have very limited environmental impact.
If the investigation clears Energem and the project moves forward the cost of the project is estimated at $2 billion, with a five-year construction period.