Tanzania disbands parliament energy committee over graft claims

DODOMA, Tanzania (Reuters) - Tanzania disbanded a parliamentary committee on Saturday after some of its members were accused of corruption and potential conflict of interest over their alleged involvement in deals with the state-run power utility.

National Assembly speaker Anne Makinda disbanded the energy and minerals committee, charged with overseeing the mining, oil and gas sectors.

"I am disbanding this committee and have instructed the parliamentary ethics and privileges committee to draft a strict code of ethics for members of parliament," she told parliament.

Tanzania is Africa's fourth-largest gold producer and is fast becoming an energy hub in east Africa following recent major natural gas discoveries offshore.

Investors have long complained of graft as one of the main reasons for the high cost of doing business in Tanzania, while the public is losing patience with the government over the slow pace of fighting the problem.

Lawmakers have accused some of their colleagues in the 28-member energy and minerals committee of bribery and conducting private business deals with the state-run Tanzania Electric Supply Company (TANESCO), whose managing director was suspended in mid-July on allegations of embezzlement and abuse of office.

Among other accusations raised in parliament against some members of the committee was a claim that they received bribes to try to defend the suspended management of TANESCO.

The speaker said she had ordered an internal investigation into allegations that some MPs in the energy and minerals committee had either received or solicited bribes.

She said she would disband other parliamentary committees facing similar graft allegations and reconstitute them in an attempt to restore public confidence in the national assembly.

Energy and Minerals Minister Sospeter Muhongo told parliament on Saturday TANESCO's managing director William Mhando was suspended pending an investigation into claims he awarded a contract worth more than 880 million Tanzanian shillings ($557,700) to a company that he jointly owned with his wife and children.

Muhongo said the TANESCO chief, his deputy and two other senior officers were suspended over these allegations of graft in a contract involving the procurement of oil for a 100-megaWatt thermal power plant.

Mhando, who has denied the allegations, is being investigated by the government's chief auditor, said the minister.

Tanzania's energy sector has over the past five years been hit by widespread graft allegations amid a chronic energy shortage.

In 2008, the country's former Prime Minister Edward Lowassa and two other ministers were forced to resign after a parliamentary probe linked them to a scandal over a power generation contract. ($1 = 1578.0000 Tanzanian shillings)

(Editing by George Obulutsa)